I have done a lot of research on my old 401k. I do not want to withdraw any of it. I do not want to move it to my roth ira as I would owe taxes on it. I also do not want to move it to my new employers 401k as I dont like the custodial fees or even the funds they have.

As soon as I was ready to move it to a new roll over ira with fidelity they called me and are asking me if I was sure I wanted to move my money to a roll over. When I mentioned that its not doing me any good sitting there and being invested on no new contributions they get quiet. They continue to try to schedule me with an expert to talk about retirement goals. I dont really want to discuss my retirement goals sometimes people dont have everything to the penny planned out.

For reference the old employee 401k is from fidelity and has around 750k in it. Im in my early 40s as well. I was planning to roll it into a new rollover ira account with the exact same mutual funds as what i had in my 401k. I checked and they are available. The benefit being i can actually contribute upto 6k yearly based on my age (as of 2021). So same mutual funds and actually being able to contribute money vs having a 401k sitting there and being never contributed to.

When I press them on why i would leave it in my old 401k they say ya we understand that is why we want go get you more expert advice.

What are the pros of leaving my money in my old 401k. I dont really see any benefit. What is fidelity seeing that I am not?

  • "..the old employee 401k is from fidelity and has around 750k in it. Im in my early 40s.." Maybe you should retire? :D www.mrmoneymustache.com Commented Mar 20, 2021 at 0:39
  • Does this answer your question? Should you always rollover a 401k to a personal IRA after leaving a company?
    – yoozer8
    Commented Mar 20, 2021 at 3:40
  • You can also just open an IRA at Fidelity (or wherever) and contribute the $6k, that has nothing to do with what you want to do with this 401(k).
    – quid
    Commented Mar 22, 2021 at 5:02
  • @quid leaving it in a 401k for an ex employer is not recommended as their are administrative costs as well as limited funds. So no its not the same.
    – JonH
    Commented Mar 23, 2021 at 0:07
  • I didn't opine on whether or not you should leave the 401k where it is. I said it doesn't have any bearing on whether you can open the IRA and contribute to it. So "being able to contribute" has nothing to do with this decision because you can do that either way.
    – quid
    Commented Mar 23, 2021 at 0:12

2 Answers 2


It sounds like you have a good feel for your options. Some typical reasons why you wouldn't want to roll over a 401(k) to an IRA are (1) your 401(k) has access to institutional funds that have lower expense ratios than you could access on your own (not as big of a factor these days with lots of low-fee funds available to the everyday investor), (2) 401(k) have federal bankruptcy protection, whereas IRAs may or may not have state protection (but do in most states), and (3) keeping the ability to do the backdoor Roth IRA in the future if your income increases above the contribution limits.

If none of these apply to you, then a rollover makes a lot of sense. It's really surprising to me that Fidelity would try to delay this because you're not moving the money to a different brokerage, and they would actually have more opportunity to pitch their investment advice in an IRA versus a 401(k). I would recommend asking to do the rollover again, and if they continue to delay, politely say you don't need any advice and you want to move forward. This is a very reasonable request and they should honor it in a timely manner. If your 401(k) is also with Fidelity, they should be able to do the rollover electronically overnight (at least in my experience).

  • Yes my old employee 401k is with fidelity. My new one is with John Hancock. Im not taking anything out of fidelity so i dont see any pros with having it stay in my old 401k.
    – JonH
    Commented Mar 20, 2021 at 3:13
  • I just used the fidelity website and manually moved it myself. I don't need these guys planning my future. The best person to plan your future / retirement is yourself - don't trust that a strange knows better about you then you!
    – JonH
    Commented Mar 21, 2021 at 17:37

The old 401(k) custodian wants you to keep the money with them so that they can make money off the fees. If you want to move the money from the 401(k) they would like you to put it into an IRA with them because they will collect some fees. Maybe not as much as they would from the 401(k) but more than they would if you sent all the funds out of their company. They will try and keep you in the plan that makes them the most money, which is the 401(k).

In general money in old 401(k) accounts has less investment options compared to most IRA funds. The costs inside a 401(k) are also generally higher. You noticed that when you decided that you didn't want to transfer the money from the old 401(k) to the new 401(k).

To skip the pressure from the old custodian, just fill out the paperwork. Sometimes the new investment company can help. They want your money. The type of transfer is done every year by millions of people. In fact start with the new company, they will tell you exactly how the funds have to be transferred, and what words have to be put on the check, and where it has to go.

Now I do have a few comments about items in your question that need to be addressed:

When I mentioned that its not doing me any good sitting there and being invested on no new contributions they get quiet.

You mention that you have $750K in that 401(k). It will grow just fine in the old account. The fact you can't contribute money to it is immaterial. If you think the average growth is 7% it doesn't matter if it is in an old 401(k), a new 401(k), or an IRA. If the money is invested the same way the lets say S&P 500 the only difference would be due to fees.

Let's look at the math.

You have 750K in an account that grows by 7%. That will end the year with a value of 802.5K. If the 6K in new money is added on January first the 756K will grow to 808.92. Now imagine the 6K has to be in another account. The 6K at the start of the year grows to 6.42K. When 6.42K is added to 802.5K the result is 808.92K The same number.

This is the distributive property.

x*1.07 + y*1.07 = (x+y)*1.07

The benefit being i can actually contribute up to 6k yearly based on my age (as of 2021). So same mutual funds and actually being able to contribute money vs having a 401k sitting there and being never contributed to.

You ability to contribute money to an IRA is not related to where the $750K is invested. The math works out the same either way. Now if you are a job hopper and have had 10 separate 401(k) accounts, and you also have multiple IRA accounts, that is harder to track and more problematic when calculating required distributions, but your aren't at that level of complexity.

So yes move the funds. Do it to reduce fees, do it to open up more investment choices, do it to streamline tracking. But the money will grow the same way (ignoring fees) if the plan is to pick the same mutual funds/ETFs in all your accounts.

  • You got a couple things wrong in this answer. Firstly, the old 401k is with fidelity. The rollover would also be with fidelity - so it is the same company not a different company. Also you mentioned the money is the same...no not even close to being the same. In my old 401k NO NEW CONTRIBUTIONS can be made to it. That means whatever gains / losses I make its based on the same baseline of money - no additional contributions can be made. I dont know about you but 6k dollars per year is a lot of money and adding that to my rollover ira is certainly better then a stagnant 401k.
    – JonH
    Commented Mar 21, 2021 at 17:17
  • I added information on the distributive property. To how that the math is the same either way, if you ignore fees. Commented Mar 21, 2021 at 20:57
  • Yes you are right. Sorry i mistakenly misread this answer +1.
    – JonH
    Commented Mar 23, 2021 at 3:30

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