Should I Roll My 401(a) Plan or Leave It?

Should I Roll My 401(a) Plan or Leave It?
Nix the guesswork and scrolling. We’ll connect you with investment pros we trust: bit.ly/3kwqrhf
Listen to how ordinary people built extraordinary wealth-and how you can too. You’ll learn how millionaires live on less than they make, avoid debt, invest, are disciplined and responsible! Featuring hosts from the Ramsey Network: Dave Ramsey, Ken Coleman, Christy Wright, Rachel Cruze, and John Delony.
Ramsey Network (Subscribe Now!)
• The Ramsey Show (Highlights):
www.youtube.co...
• The Ramsey Show (Full Episodes): www.youtube.co...
• The Dr. John Delony Show: www.youtube.co...
• The Rachel Cruze Show: www.youtube.co...
• The Ken Coleman Show: www.youtube.co...
• The Christy Wright Show: www.youtube.co...
• EntreLeadership: www.youtube.co...

[@RamseyEverydayMillionaires]

Nix the guesswork and scrolling. We’ll connect you with investment pros we trust: bit.ly/3kwqrhf

[@saul1629]

I don’t think this guy know what his plan offers. I would recommend he reach out to his employers HR team and discuss his options. Things can go very wrong when you follow advice blindly without additional research

[@AB-wy7dr]

Agreed, I don’t even think he knows how much of his $60k is his contribution vs. employer match. He kept saying “they match 50% so that’s $30k”, but I’m assuming his plan, like most plans, is matching 50% OF WHAT HE PUTS IN. Which would make him wrong, by a good amount. Guy just sounds like he needs a clue.

[@ItsMeCJ]

This is interesting. I left my job with a 401(a) and my plan was 100% employer contribution and the employees weren’t allowed to contribute; however, I was able to take it with me and roll it into my new plan. He couldn’t vest until age 50. Crazy!

[@jesusbowls]

Jesus, the "a" in 401(a) doesn't mean that it's after-tax as Dave flippantly states.

[@brandonk1097]

Exactly, most people don’t know what they are because they’re not very common, but I would expect Dave to know. I work for the state and have one

[@damondiehl5637]

A 401(a) plan is a type of retirement plan made available to those working in government agencies, educational institutions, and non-profit organizations. Eligible employees who participate in the plan include government employees, teachers, administrators, and support staff. A 401(a) plan's features are similar to a 401(k) plan, which are more common in profit-based industries. 401(a) plans give the employer a larger share of control over how the plan is invested. Investments in 401(a) plans are low risk and typically include government bonds and funds focused on value-based stocks. Some employers link vesting to years of service as an incentive for employees to stay with the company.

[@9liveslisa]

Wow! I've never heard of a company not let you keep your matching. That sucks.

[@sandyseibelhager7131]

It takes ten years to be vested in our pension plan. If you take it before then you only get your contributions. We get No say in the amount or options for our contributions. It does not earn well.

[@darkillusion2070]

I just found out about that, they told I get 100% in 5 years

[@scmsean]

This is why Dave recommends advisors. I think this guy just doesn't know anything. Vesting requires you to be working for the company. You can't quit and leave your money in company plan and still be vesting.

[@aaront936]

Dave recommends advisors because his list of advisors pays him commissions. Everyone would be better off in the long run using low cost index funds.

[@toeknee5565]

I have been in the Wisconsin retirement system since 2019. I can tell you for certain there's a five-year vesting period. If you leave before the five years you don't get any of the employer contributions

[@FrankS111]

More and more companies are doing LOOOONG term vesting requirements regarding the match.

[@youngjedi5599]

Five years for mine. January will be 5 years and I will be 100% vested.

[@LeonardoGrigio]

As I see these comments as well as Dave it appears Dave should not take this call unless he understands what 401a is. Like other types of plans, i.e. 401ks, some and some not so good.

[@bobbijohnson5648]

If he was in the WRS retirement plan they vest after 5 years of employment with a local government, state or school district employer. It's a pension not a 401k plan. The plan is extremely successful in the investment options the Board chooses because of knowledge advice.

[@MattyLight30]

This was cringe, and hard to watch. It’s what all of these garbage venture capitalists companies do to get that catchy “employee owned” slogan for the marketing team. They use ESOP/profit sharing to make the “match” contribution, they do contribute and invest these funds quarterly. Then they categorize you as an “owner” or “chair holder” of the company, all while making it impossible to get any answers on the slush fund. Also having language buried in the BS fine print stating if you “succeed your ownership in the company” or “voluntarily forfeit your position” you loose everything the company contributed, plus the interest. All while also having arbitrarily added stipulation like needing 40+ years of service or minimum age needed to receive 100% of the funds, and having “fund managers/boards” that can completely deny your “request” to Your funds. So if you try to leave or get fired and roll your remaining 50% funds to an IRA it was never considered a retirement account by the Government and they ste…..take its 20% and you wind up loosing

[@rajbeekie7124]

I am 99% confident this man does not know much about his 401K plan. He need to research his plan. Many 401k plans are pretty decent, not all of them stink.

[@kpeggs82]

I agree. Also this could complicate other investments now or in the future. I am the naughty person that has both a pervious tsp and a 401 l from another job but if I roll it I can no longer back door IRA until I move all of it into a Roth. I am able to choose the. Investments so there is no reason to move at the moment.

[@Northdallasguy00]

I agree, the majority of people don’t understand and or know much about their 401(k).

[@harrychufan]

It’s not a 401k, it’s a 401a which are through government agencies and nonprofits and can only contribute pretax dollars.

[@brandonk1097]

He has a 401a, not 401k. I also have one because I work for a public employer, and everything sounds correct that he said. Cant choose the investment, except mine is 100% employer contributions and I can’t contribute any extra. But mine is 100% vested immediately

[@LeonardoGrigio]

Dude. Pay attention. You’re addressing the wrong plan type!

[@evelynandys9917]

The biggest fear is the fear of failure. So what we need to agree upon together, and on a personal level, is to discipline our mindset into realising that there are no failures, there are only results or outcomes. You never fail in life, you always succeed. You succeed in getting results of some sort. The key is what we do with those results.

[@taralewellen1979]

You don’t have to study the roots of a plant to be able to pick the fruit! In my opinion experiential learning is far more powerful

[@michaelhaaland735]

You need to ascertain where the value lies, in order to minimize your risk.

[@martinharval8465]

@@michaelhaaland735 been online doing some research Bit coin and stocks has been in the news lately, quite acknowledged wanted to trade Crypto but the fluctuations in price gave me another bewildered look.

[@mihaelabivoltimus9846]

@@martinharval8465 as a abecedarian investing in crypto will be best for you, but you can't do that on your own without having a guidelines or strategies I know of a portfolio/investment manager, Mr Robertson smelser an expertise in trade investment as you don't have to under go any stress about the fluctuations in the trading market he has been manage ing my trade for 4years now.

[@JustinCase780]

So true. Hanging on to that bag of bones for 20 years is bad karma. A 20 year reminder of the old stinkin' job that gave you a horrible retirement option.

[@lmichael5034]

No way would I take the money - who is to say the current plan wont do 10% and takeing a 30k hit hoping for a better result. It's only 30k let it ride and start fresh

[@walnutinvesting689]

The 401k where the company picks the stock fund for you is probably a target date fund so the returns will be more conservative vs what dave prefers.

[@scmsean]

Those funds also have very high fees.

[@mrstinky2421]

@@scmsean untrue

[@scmsean]

@@mrstinky2421 Yes, it is true. Targeted funds usually have a 1%-2% fee. That is huge. When you can get an index fund with a .04% fee. Go into a retirement calculator and enter 1.5% less and see the difference. For me that would be millions. I do max out my 401K every year though.

[@mrstinky2421]

@@scmsean vanguard is .13 lol

[@joshuaharwell3685]

If he doesn’t move it he can’t add to it to make it grow faster. I may be wrong with my thinking, if so let me know I’m new to this. And if he does roll it over should it go into a Roth? Thanks, Joshua

[@Gibb591]

I'll clear it up a bit. He can't keep adding to that plan but he can start a different 401k to add too while still keeping the old one. Next point, a Roth is a term that denotes an IRA as already having paid taxes. If he rolls it, this must stay in a 401k and not IRA to avoid penalties, but since he has already paid taxes on it, yes it will be in a post tax 401k, some still call this a Roth 401k

[@Northdallasguy00]

Well whether he keeps that plan the old one or rolls it into a new IRA, he can only put the same amount in both funds or just one fund total. So $6000 can go into one IRA or it can be spread across two or more IRAs.

[@aaront936]

@@Northdallasguy00 the contribution limit for a ira is 6k. 401k's allow an additional 19500

[@damondiehl5637]

When you stop working for an employer, you have the option to leave your money where it is, roll it into your new 401k, or roll it over to an IRA. Old 401k to new 401k has to happen in the first 60 days of employment at the new employer. You can roll it over to the same type of IRA (Traditional to Traditional, Roth to Roth). If you want to roll a Traditional 401k to a Roth IRA, you will have to pay the taxes, as you are moving from a pre-tax plan to a post-tax plan, and the government wants their cut. You can pay the taxes out of pocket or sell some of the stock that would otherwise be transferred.

[@rachelharrison7961]

Has the money not gained or lost a single penny? Or is he not allowed to take the earnings on the match either?

[@bossman5161]

The math is wrong...if 30 = 60 = 120 = 240; then 60 = 120 = 240 = 480; Not they're "exactly the same"

[@damondiehl5637]

At 7%, it does not double as quickly, so in that 21 year span it only doubles twice, whereas if he takes his $30k out and invests it himself, it doubles three times. Vanguard has seven ETF products that have a track record of returns over 12%, and that is since inception (over 40 years for some of them). The best ones are at over 16%, which means they double every 4.5 years, so his money would double almost five times in that same 21 year period.

[@aaront936]

If the funds in your old plan are good and the fees are low leave it there. Dave only recommends rolling it to a traditional ira so his smart vestors make more and dave gets a bigger cut.

[@saulgoodman2018]

30, 601 120, 240. I can do it in my head without any paper. He's been forgetting a lot of things lately.

[@MrOfficer235]

Cash it out

[@AuthorLHollingsworth]

These companies dont care about any of us. Please have your money invested into other places, so you can retire.

[@LeonardoGrigio]

It’s not a company, but a nonprofit or a government entity. There are similarities, of course.

[@user-nu4cr1bh7m]

Hey....how old are you?.......LOL

[@mrstinky2421]

Keep it there. The return you need to match to pull ahead will lead to unnecessary risk.

[@Northdallasguy00]

I agree. Not sure it would be worth risking for 1-2%

[@damondiehl5637]

It's gotta sit there for 20 years? I think Dave is right, he can take his $30k and double it every 7 years, so that is almost three doublings (2.777 times).

[@evardmuts]

what about fees? I had to take my roth 401K out since it had like 0.4% yearly fee and rolled it to my roth IRA with 0.35% plus in my control and clear on what I invest on

[@saulgoodman2018]

Boomer, he said 3 times that he is 30.

[@musicpro7278]

Boomer u can't even tell its a he not a her

[@Gibb591]

Saul why do you even watch these videos

[@musicpro7278]

@@Gibb591 this dude has something negative to say in every video and its sad

[@saulgoodman2018]

@@musicpro7278 People have to learn to take a joke. And stop taking everything so seriously all the time.

[@musicpro7278]

@@saulgoodman2018 a joke is once or twice. U do it on every video

[@ScaryBunnyMonster]

First!

[@catlady2795]

Don'tcha just love it! 😁