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Can I make cash deposits into my old Fidelity 401k

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jaybird28
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Can I make cash deposits into my old Fidelity 401k  Reply with quote  

I Have a Fidelity 401k from a previous employer and I'd like start putting cash into my funds I still have with fidelity. I have a 401k with my new job but the performance is not anywhere as good as my old Fidelity. Is this even an option????
Post Sat Jan 05, 2013 9:19 pm
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oldguy
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Convert the old 401k at Fidelity to a Traditional IRA - that's not taxable, and it puts the money under your control.

As for the new 401k, it has several investment choices - find out what the Fidelity money is invested in and try to replicate it in the new 401k, that company probbly has a fund that is very close to the Fidelity fund.
Post Sat Jan 05, 2013 9:44 pm
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jaybird28
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Thanks for the reply. My new 401k is with Anheuser Busch without as many options as Fidelity. If I convert my old Fidelity to a traditional Fidelity IRA will the same funds be available to me? I'm not to educated on what the difference is between a 401k vs an IRA
Post Sat Jan 05, 2013 10:08 pm
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smk
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quote:
Originally posted by jaybird28
Thanks for the reply. My new 401k is with Anheuser Busch without as many options as Fidelity. If I convert my old Fidelity to a traditional Fidelity IRA will the same funds be available to me? I'm not to educated on what the difference is between a 401k vs an IRA


in an ira, you can invest in anything generally available. when you have it with an employer, they may have negotiated specific funds which are nt widely available or funds which are widely available but they got a lower expense ratio.

if you liked a fund, you can look up its name and see if it is offered to the general public. if it is, you can buy it in an ira. you might have to pay a higher expense ratio if your old employer had a good deal.

before you decide whether you really like a fund or not, it is a good idea to do something called style analysis (developed by william sharpe). with this they statistically break down the sectors of the fund to determine where their returns come from. then you see if you purchased those exact sectors with lower cost index funds, would you have gotten a better return or not. if you still like the fund after that, then go for it. you can access style analysis if you put (i believe) 50k in vanguard and open an account with financialengines.com (sharpe's company). otherwise i think you would need to pay $300/year for their services.

Steve Kanney, CFA
http://www.integratedfinancialny.com/index.html
Any comments made are designed to help you make your own decisions and do not consititute investment advice.
Post Sat Jan 05, 2013 10:17 pm
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jaybird28
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If I wanted to stay with Fidelity could I easily close my old employer 401k and open a IRA with them, thus having access to my money????
Post Sat Jan 05, 2013 10:32 pm
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coaster
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quote:
Originally posted by smk
before you decide whether you really like a fund or not, it is a good idea to do something called style analysis

You'll find this at www.morningstar.com

You'll need to sign up for at least a free account to get access to the analysis features.

~Tim~
Post Sun Jan 06, 2013 7:21 am
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raemart
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Hi JayBird28, this post is several months old so you may have already made your moves and changes.

A 401K usually does not have a huge array of funds to pick from........ but......within those few choices there is most likely a safety fund you can choose to harbor your money, for a time, if the market goes south, like in 2008. That safety fund is sometimes called a stable fund and could even be a money market fund within your 401k. While there, you would not have much gain but your would not have the huge losses either(40% for some). An IRA does not offer these stable funds so you are at the whim of the market when you are in an IRA, Roth or Traditional. About the only safety you would have in an IRA would be a super diversified fund.......something with 3,000 companies or more. But you would still be 'in the market' and take your gains as well as your losses.

To me, this is the biggest difference between a 401K and an IRA. Just my two cents.
Post Sat May 04, 2013 2:32 am
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coaster
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Actually, raemart, you can have pretty much anything in an IRA. Well, almost anything. Some people even have real estate in IRAs. A money-market fund in an IRA would be an example of the type of investment you're describing. Remember, "IRA" is just the set of IRS regulations that describe the "container", not what's IN the container. Wink

Nice to see you back. And the two cents. Smile

~Tim~
Post Sat May 04, 2013 4:10 am
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MrNewEngland
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quote:
Originally posted by smk


in an ira, you can invest in anything generally anythings.


Can I buy real estate under an IRA?
Post Sat May 04, 2013 11:58 pm
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coaster
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Yes, if it's investment property. You cannot buy a personal residence. You must find a custodian that's set up to act as custodian for that type of investment. Here's an article:

http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/

~Tim~
Post Sun May 05, 2013 2:56 am
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clydewolf
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Re: Can I make cash deposits into my old Fidelity 401k  Reply with quote  

quote:
Originally posted by jaybird28
I Have a Fidelity 401k from a previous employer and I'd like start putting cash into my funds I still have with fidelity. I have a 401k with my new job but the performance is not anywhere as good as my old Fidelity. Is this even an option????

No, to contribute to a 401k plan, you must be employed by the employer that sponsors the 401k plan. Since the plan that Fidelity administers is with a previous employer you can not make those contributions you wish.

As others have posted, it may be a good idea to do a trustee to trustee transfer of that old 401k to an IRA. This should be easy to do, talk to Fidelity they have handled this situation before. Tell them you want to keep your 401k investments in the same or similar mutual funds. I am sure they will suggest the funds for you to use in your IRA.
Post Mon May 06, 2013 7:41 pm
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