Considering current market situation is it wise to convert 401K account into IRA

Question

This is what I know about 401k and IRA accounts:

401k accounts are employer-sponsored plans, which means that you can only participate in a 401k plan if your employer offers one. IRAs, on the other hand, can be opened and funded by anyone who meets certain income requirements.

I currently have a 401k account & my current employer is matching my contribution. My current 401K account is with Fidelity & it is Five year old.

I am changing jobs and my new employer uses Vanguard to manage 401K accounts.

I did read few articles about moving 401k to IRA

Why would you not want to rollover a previous employer's 401(k) when changing jobs?

401k rollovers - pros & cons question

I have following questions:

1. Can I continue to use both Fidelity (keep running my current 401k account) and Vanguard 401k accounts ? Would my Fidelity account attract any additional fees?
2. Considering current market situation (most index crashed by 30% from the peak & volatility), it is wise to move funds between Fidelity account to Vanguard account ? So lets say my account has $30,000 and I move the fund to IRA account or Vanguard 401K account, will I get the same value of $30,000? and lets say in next 1 year market gains 20% would I make same money by keeping money in Fidelity's 401k account or if I move it to an IRA account ?

Answer 1

You can't run your Fidelity 401(k) account in the sense of making contributions to it after your have left your current employment. Depending on exact circumstances, your employer might or might not deposit any accrued but as yet unpaid matching contributions to your 401(k) account after your resignation date. Your Fidelity 401(k) will continue to be charged maintenance fees even after you have left your previous employer.

With regard to whether it is wise to move money (401(k) to 401(k) or 401(k) to IRA) during a market downturn, if you move $30,000 from one investment to the other, your new account will have $30,000 in it (or maybe a tad less if your 401(k) plan charges an exit fee). Depending on the investment chosen, your gain during the coming year may be smaller or larger or the same as the "market gain" of 20%; it all depends. If you want exactly the same gain as you would have gotten in your 401(k) plan, roll over your Fidelity 401(k) plan assets into a Fidelity IRA invested in exactly the same funds in exactly the same amounts. But be aware that many funds have minimum initial investment amounts that are waived for 401(k) accounts but might not be waived for IRA accounts, and some IRA custodians charge an annual account maintenance fee for small IRA balances.