DFIGTREE wrote:
- quote -

A 401k provides withdrawal advantages over an IRA. If you are layed
off at 57 you can withdraw funds with no penalty. You need to get this
info from your former employer.

Frank

John A. Weeks III wrote:

- quote -

True story: a "large employer" decided to change the financial
institution managing the 401(k). For almost a month the funds were
"locked" meaning no employee could change their investment allocations
or anything else. If the markets were to suddenly shift, you're
screwed. If you don't like the new bank, you're screwed (until you
rollover, that is).

Even after rolling over, I don't keep all retirement funds at a single
institution. What happens when (not if) they experience a major
computer systems outage? (there are so many possible, realistic causes,
I can't even begin to list them here or the moderators would frown). At
least the other institution(s) is likely to still be up and running.

-Mark Bole

DFIGTREE wrote:
- quote -

I will add one thing to what everyone else has said. Rolling the money
over to an IRA will allow you to withdraw the money early, without
penalty, for certain expenses. These expenses are described in detail
in IRS Pub 590. Here's the summary list from said publication:

1) You have unreimbursed medical expenses that are more than 7.5% of
your adjusted gross income.
2) The distributions are not more than the cost of your medical
insurance.
3) You are disabled.
4) You are the beneficiary of a deceased IRA owner.
5) You are receiving distributions in the form of an annuity.
6) The distributions are not more than your qualified higher education
expenses.
7) You use the distributions to buy, build, or rebuild a first home.
8) The distribution is due to an IRS levy of the qualified plan.

You said that you don't need the money. Regardless, I believe that
having this flexibility is a Good Thing (tm), especially since you
don't have to pay anything for it.

--Bill

DFIGTREE wrote:

- quote -

There are few advantages, given what you told us. 'Low expenses' is a
great reason to stay put.

Do you have children, or a spouse? An inherited 401k may have forced
withdrawal to any heirs within 5 years of death. IRAs may be converted
right to the spouses name or left titled as 'inherited IRA'. For
non-spouse beneficiaries, they can take withdrawals over their lifetime.

For you, an IRA offer you the option of Roth conversion. I wrote of two
circumstances where Roth conversions were beneficial and reprint my
comments at http://www.joetaxpayer.com/roth
The Roth conversion will be allowed in 2010 regardless of income level.

If besides the low expenses, the fund choices themselves are sufficient,
there's little, reason besides my notes above, to convert.

(I forgot one - those institutions can sell you a Variable Annuity, and
receive a large commission for doing so. Completely inappropriate for
your situation, but great for the seller.)

JOE

In article <1158209898.796444.88440[at]b28g2000cwb.googlegroups.com> ,
"DFIGTREE" <david.Feigenbaum[at]verizon.net> wrote:

- quote -

As far as I understand, a 401K is a 3-way contract between you,
your employer (or former employer in your case), and the 401K
plan administrator. It is possible that your former employer
runs into problems or goes bankrupt, and it causes you a minor
mess. As a roll-over, the deal is strictly between you and the
investment company, so you have nobody else there to mess up
your deal.

Self-directed IRA's often have much better investment choices
than 401K programs. The funds are often load funds with higher
expenses. But if you are happy with the choices and happy with
the fees, then doesn't matter, either.

If it was me, I'd do the roll-over just to make sure I have
full control over the situation. But I also have a paranoia
streak, and I don't trust former employers.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

I have a large 401k at the company from which I just retired. It has
low expenses and I do not need the money. I have plenty of investment
choices and I do not changed my allocation but once a year. I am 57.
Every financial institution is calling and mailing telling me to
rollover this 401k to an IRA. Why should I do this? What's in it for
me? None of the information I can GOOGLE convinces me.