Lump it DCA is not the way to go and statistically you will lose more.
No one knows what the market will do. But you are 37 so you won’t touch this for another 20+ years. So who cares what happens over the next1-2-3-4-5 10 years
The money in the 401k is currently invested, right? So by lump sum investing it right after the rollover, you aren’t really changing anything. By DCAing the money you are actually changing something. And in my mind, if you are going to change your investments, you should be doing it based on rational reasons. Fear is not a rational reason.
[also, a growing market spends a lot of its time at or near all time highs.](https://awealthofcommonsense.com/2024/02/all-time-highs-usually-lead-to-more-all-time-highs-in-the-stock-market/)
[as for what to invest in, a globally diversified portfolio of index funds generally makes sense. ](https://www.bogleheads.org/wiki/Three-fund_portfolio)
And no, I wouldn’t gamble on individual stocks. I would invest in index funds.
Yes 100% invested and done well. I left the employer 6 years ago and it grew $100K. I just want to put it in Vanguard or Fidelity funds (and remind myself not to play with individual stocks).
I ended up listening to the podcast episode last night. I really liked the conversation and think I'm going to incorporate this into my podcast mix regularly. Thanks for the tip! Are there other investing/financial blogs or podcasts you listen to?
If the ATH is bothering you, why haven't you liquidated the positions within the 401k already?
Because that would be silly, right?
Moving money from one retirement account to another is not a trigger to change your investment strategy or asset allocation.
However, if you expect to ever need to make use of backdoor Roth contributions, ever, you should stop and research "pro rata taxes" for the why.
Ok so good point. This brings me to another question. In addition to a wider variety of investment options, I want to rollover to an IRA because of my current employer's 401(k) admin/advisory fees. Admittedly, I was spoiled by my previous company's plan - low expense ratios on the funds + $45 annual fee. That was IT.
Current employer plan, with Fidelity, charges: .36% per year deducted quarterly (recordkeeping fee = .16% + advisor/consultant fee = .20%). Right now, I see $400+ leave my account each year. One positive is I have low ER fund options and they're decent. But is .36% considered high? Like you said, I'd lose the ability to do backdoor Roths which could really come in handy since I'm in a high income/low expense situation for the next 3ish years.
The market is almost always near its ATH, and almost always going to even higher ATHs. Over long periods of time, markets always move up. If you want to try to time it, then good luck to you. Lump sum.
Lump it DCA is not the way to go and statistically you will lose more. No one knows what the market will do. But you are 37 so you won’t touch this for another 20+ years. So who cares what happens over the next1-2-3-4-5 10 years
The money in the 401k is currently invested, right? So by lump sum investing it right after the rollover, you aren’t really changing anything. By DCAing the money you are actually changing something. And in my mind, if you are going to change your investments, you should be doing it based on rational reasons. Fear is not a rational reason. [also, a growing market spends a lot of its time at or near all time highs.](https://awealthofcommonsense.com/2024/02/all-time-highs-usually-lead-to-more-all-time-highs-in-the-stock-market/) [as for what to invest in, a globally diversified portfolio of index funds generally makes sense. ](https://www.bogleheads.org/wiki/Three-fund_portfolio) And no, I wouldn’t gamble on individual stocks. I would invest in index funds.
Yes 100% invested and done well. I left the employer 6 years ago and it grew $100K. I just want to put it in Vanguard or Fidelity funds (and remind myself not to play with individual stocks). I ended up listening to the podcast episode last night. I really liked the conversation and think I'm going to incorporate this into my podcast mix regularly. Thanks for the tip! Are there other investing/financial blogs or podcasts you listen to?
If the ATH is bothering you, why haven't you liquidated the positions within the 401k already? Because that would be silly, right? Moving money from one retirement account to another is not a trigger to change your investment strategy or asset allocation. However, if you expect to ever need to make use of backdoor Roth contributions, ever, you should stop and research "pro rata taxes" for the why.
Ok so good point. This brings me to another question. In addition to a wider variety of investment options, I want to rollover to an IRA because of my current employer's 401(k) admin/advisory fees. Admittedly, I was spoiled by my previous company's plan - low expense ratios on the funds + $45 annual fee. That was IT. Current employer plan, with Fidelity, charges: .36% per year deducted quarterly (recordkeeping fee = .16% + advisor/consultant fee = .20%). Right now, I see $400+ leave my account each year. One positive is I have low ER fund options and they're decent. But is .36% considered high? Like you said, I'd lose the ability to do backdoor Roths which could really come in handy since I'm in a high income/low expense situation for the next 3ish years.
The market is almost always near its ATH, and almost always going to even higher ATHs. Over long periods of time, markets always move up. If you want to try to time it, then good luck to you. Lump sum.
Seems to be everyone's answer - makes me feel much better about lumping it.