Dear Harry: I recently left a job to move to a similar one nearer to where I live. When I left the old job, I elected to leave my 401(k) with the old company. Shortly afterward, I got some paperwork which indicated that they were going to charge me $50 a year to continue in the plan. That prompted me to look at plans with two other employers with whom I also left my 401(k)s. Sure enough, they also had charges: one for $50 and the other for $40. None ever charged while I worked there. I was never told in advance about any of the charges. It just seemed to be less hassle to leave them than to roll them over to an IRA. My present employer will allow me to roll over these plans to my present plan at no charge. I am considering this against a rollover to an IRA. Which way should I go?
Watch for fees on old 401(k) plans
What Harry says: You will undoubtedly have more choices to select from with the IRA. The standard has to be performance. Does the history of your employer's plan options show that it is beating the performance of the old plans? In either a yes or no case, you have to compare that with the portfolios recommended by the major mutual fund companies such as Fidelity, T. Rowe Price, Vanguard, etc. My guess is that you'll find that the IRA choices are better. And saving that $140 will buy a lot of hoagies.
Email Harry at harrygross@phillynews.com or write to him at Harry Gross c/o the Daily News, PO Box 8263 Philadelphia, PA 19101. Harry urges all his readers to give blood — contact the American Red Cross at 800-Red Cross.
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