It’s a common conundrum. What to do with an old 401(k) when you switch jobs? I now have my third 401(k). It’s a solo 401(k) that I started when I began to realise some online income.
The second and final hospital job I took also offered a 401(k). It had great investment options with ultra-low fee index funds available and low fees across the board.
At some point, I will likely roll over the balance from my hospital 401(k) to my solo 401(k) but I’m in no hurry to do so. I would mainly do it for simplicity’s sake.
If your old 401(k) had low expenses, or if there were some unique investment options such as the TIAA-CREF Real Estate Fund, a nice stable value fund, or the TSP G Fund, or if your new 401(k) has lousy options or high expenses, then just leave the money in your old 401(k).
This can be a great option if you’re not interested in a Backdoor Roth IRA. Most docs either ARE or SHOULD BE interested, so this probably isn’t that good of an option for a high earner.
Sometimes it’s just easier to bite the bullet and pay the taxes. This is a good option if both 401(k)s suck, if the balance isn’t that big, and you have money elsewhere to use for the taxes due, and you DO care about backdoor Roth IRAs.