Mapgirl’s Fiscal Challenge

Journey2Retirement has a very personal cautionary tale about rolling over a 401K plan into your new employer’s plan. I thought this was a very important article about doing your due diligence before going to a new company. My additional tip is that you usually have 90 days to take a rollover withdrawl from your old company’s 401k plan. Use the first 90 days at your new job to find out all you can because you may be better off staying in your old plan, or converting to a traditional IRA instead. (This assumes you aren’t anywhere near retirement age.)

My own story:
I had money at Fidelity with my old company. My new company has an investment company that is primarily known as an insurance firm, whom I find hateful and annoying for reasons I will explain.

1) The funds in the new company’s plan were managed mostly by firms I’d never heard of, which is scary since I used to work for a financial research provider and I have heard of nearly every mom and pop fund shop imaginable. Therefore I found it a wee bit frightening when I barely recognized the 6-10 fund providers in the plan. (It’s been a b*tch to do my own research on these firms beyond what the plan serves up. I can’t even find the right tickers for a lot of them.)

2) The GUI on the insurance company website sucks. And even though it was redesigned, it still stinks in terms of display and navigability. (I am a user experience snob, so sue me.) Why they have fixed pixel width windows makes me oh so very angry, especially since I can’t view it on my company-issued laptop’s 800×600 screen. There is no way to track a fund’s daily price over time in a pretty graph. Or do a side-by-side fund comparison. While I realize that past performance is no guarantee of future results, I find it useful as a quick and dirty point of comparison which Fidelity’s site allows.

3) They also don’t let you keep your records online indefinitely. Well, who does? Indefinitely is admittedly a really long time. However I’ve been with my current employer less than 2 years and I cannot access online transactions over 18 months old. Therefore, if I didn’t have Quicken, I’d be toast! That’s just crazy not let a person keep at least 2 years’ worth of records.

When I landed at my new company, I was surrounded by former co-workers. Mind you, I barely know these people, but I knew one of them sits on Yahoo Finance all day long, so I made a few small inquiries about which funds he liked and why. Turns out he sees a financial advisor and passed along his advisor’s recommended asset allocation plan for me to view. (He got there a few years before I did, and he’s a little older than me so it’s not THAT crazy to use the same one if we are of the same risk tolerance. Of course I tweaked the allocation to suit my tastes and have changed it over time. Not just a rebalance, but a full on change.)

Since I have to throw my money into the funds in the current plan and I was unsure of the plan choices, I decided not to rollover my old plan into the new one, but left my old funds in a Traditional IRA rollover account instead. At the time, the Fidelity stuff was going great so I didn’t see a reason to leave those funds and join into great unknown expanses of mutual funds I’d never heard of. There didn’t seem to be a point in chasing last year’s returns on funds I knew nothing about. So I used my colleague’s advisor’s advice to pick funds for my new allocation, the plan provider’s risk tolerance quizzes and asset allocation plans, and that was pretty much it.

I can guarantee you that when it’s time to leave this plan, I’ll be pushing all my money into the account at Fidelity. Sure I’ll lose a 10-year top performer of an International Equity fund, but I am not bothered by this in the least. It could all go south quickly tomorrow, and I don’t mean to Tierra del Fuego.