Many 403b plans will have a surrender charge schedule. It’s certainly possible to rollover, but it may not be a good idea in many instances until that schedule expires.
I will add another vote for a Vanguard IRA. Vanguard is a unique company with some of the lowest fee funds in the business and dedicated to NOT ripping people off with fees.
I understand that fund selection and the stock market can be intimidating and scary - BUT, choosing an all cash approach is the only certain way to lose money (due to inflation).
My wife feels similarly but she has decided to divide her IRA between the Vanguard Wellesley and Wellington funds. This gives her a 50/50 mix in low fee funds that have existed (and grown) since before the Great Depression. A money manager friend of mine calls those two funds “little old lady funds” because generations of women have had a reliable income from them.
My often shared personal example is a retirement account of mine that started out with $2100 in 1980 - in a 50/50 mix. I ignored it out of laziness…
It is now worth $67,000 - just by letting it sit.
I believe the money in 401k programs are considered assets of the company and can be at risk if the company experiences financial problems. Rare, I assume, but possible. Also, 401k programs usually have higher management fees associated with them than you would pay in a self-directed IRA.
I don’t think that’s true; I believe the 401(k) money (particularly the employee contributions) are held in trust for the employee.
IIRC you can have a screw-up with your last paycheck, where the withheld but not yet deposited contributions aren’t yet under the protection of the 401k, but also aren’t privileged debt like wages are.
Perhaps, but that’s different from saying, “the money in 401k programs are considered assets of the company and can be at risk if the company experiences financial problems.”
Absolutely. I’m not aware any such risk once the funds are locked away in the account.
If any of you knows otherwise, please let us know ASAP and I’ll start getting nervous. 
I concur. 401k assets - discounting funds earned but not yet deposited - are held in trust by a third party and are generally immune to the fortunes of the employer.
One caveat: if the employer matches in company stock there can be significant exposure to loss. Talk to those poor bastards over at Enron.
I agree with Ruken, Dewey Finn, and Jonathan Chance who note that your 401(k) assets aren’t at risk if your company goes bankrupt. Under the Employment Retirement Income Security Act, companies must keep their employees’ retirement plan assets separate from their own accounts. http://www.dol.gov/ebsa/newsroom/fsbankruptcy.html
The Department of Labor will even go after employers who fail to put those last paycheck contributions, called unpaid employee contributions, into the retirement plan as they are required. http://www.dol.gov/ebsa/newsroom/fsREACT.html
You could even, if you wish, simply move it within Fidelity. I don’t know if the investments would even need to be “sold” per se, I’d bet you could leave them in the same investments if you wished.
If you move it to the credit union, what would your plans be? Leave it in a cash-type account earning minimal interest? That may well be the right option for you, of course. Some credit unions also offer some investment services.
Oooh - I’ve mentioned it here before, but there is a small chance that moving 401(k) funds to an IRA could put them at risk: 401(k) funds cannot be touched by lawsuits or bankruptcies. IRA funds can sometimes be at risk. States that offer any protection at all might allow anything over, say, 1 million to be accessible by a creditor. Laws vary by state as I understand it. Cite1. Cite2.
Relevant recent news:
“In a unanimous decision, the Supreme Court has ruled in favor of participants in Edison International’s 401(k) plan who claimed company fiduciaries violated their duty to monitor three retail-class mutual funds.”
“US court hands win to employees in 401(k) dispute”
http://www.cnbc.com/id/102687579
Mama Zappa:
“Oooh - I’ve mentioned it here before, but there is a small chance that moving 401(k) funds to an IRA could put them at risk: 401(k) funds cannot be touched by lawsuits or bankruptcies. IRA funds can sometimes be at risk. States that offer any protection at all might allow anything over, say, 1 million to be accessible by a creditor. Laws vary by state as I understand it. Cite1. Cite2.”
This is major–thank you for this–hadn’t occurred to me. This could be a major factor in my decision. Keeping retirement $$ in a protected acct might outweigh advantages of having more direct [IRA] control. Will investigate further–
What state are you in, Lynn? I’d be glad to look it up.
Watching this with a lot of interest, as that’s where I am. I want to leave some monies in the co. 401 as there is a small match, but move the bulk of it. I researched and checked ratings on Fidelity and Vanguard, and chose Fidelity. Began the process of setting up the IRA to receive the monies, and go to the part asking if I agreed to the terms and conditions. Oh, I’d better read them. Printed them off. 1 1/2" PAGES of small type. Jeez. I guess I’d better read thru all this, but my eyes are drooping at the 2nd page.
Before you bother, you may want to find out of the adminstrator allows you to move funds out of an active account, assuming you’re still working there.
Yes. No employer I’ve ever worked at has allowed you to roll over 401k funds while still employed with them, unless the rules have recently changed.
Insurance plans are not a good method of saving for retirement. Only insurance agents would normally recommend such.
And if DummyGladHands isn’t still working there, can he move some of the money out of the 401(k)? I thought you had to move all or nothing.
This is like saying “Grapes are better than oranges, because grapes are better than apples.”
You claimed two advantages of a 7702: it grows in value, and your heirs get the balance when you die. These are also true of an IRA, assuming you invest the IRA funds in securities that increase in value.
A 7702 may come with value increase guarantees, which an IRA does not (unless within the IRA you invest in instruments that have guarantees.)
BTW, another thing to consider is that a 401k and an IRA don’t always have all the same benefits and disadvantages. The rules keep changing, and currently I don’t know of any significant differences, but you should consult an expert. It may be beneficial to roll the 401k into a new 401k rather than an IRA. The kinds of things that can differ are ages at which you’re forced to begin withdrawing and taxation when you withdraw.
I didn’t/don’t; I generally roll my Keoghs and 401ks into a single IRA, but it’s because I prefer simplicity to maximizing my potential benefit. Some day I may regret that!
Thanks–turns out the cites in Mama Zappa post #50 have info or links to info I need–