[USER]

Started new job that has both a Voluntary Savings Plan (VSP) that I can immediately contribute to but with no match and a 403b that I will get up to a 10% employer contribution if I contribute 5%.

I can only contribute 5%, no more than that as it’s capped by my employer.

However, I can only start contributing to the 403b after one year of service.

I have an existing traditional 401k with about $300k that I can either rollover to the VSP now and start contributing to it immediately or I can wait the year and roll it over to the 403b.

One thing to note is that these will always remain separate accounts.

I can never combine the VSP and 403b accounts.

Right now, I’m considering opening up a Roth account for the VSP and let the existing 401k sit for the year and roll it over to the 403b since it’s a traditional account and will have more “free” money contributed to it once it’s started/opened.

Do you think that’s a good strategy or should I roll over the 401k now?

[Tom]

Rolling it into a tIRA with Fidelity or Vanguard would most likely allow you the best fund options with the lowest fees.

[John]

I see little point in moving it to the vsp. The 403 is where you’re going to want to be anyway.

I’d see what the investment options are before rolling over to either.

An IRA likely gives you better options and there’s nothing forcing you roll over to the new employer.

If you want all with the same broker, the 403 broker likely has IRAs also.

[Max]

I would actually roll over your old 401k into an IRA and strategically start converting it into a Roth IRA.

[Sandy]

Agree that given the 403(b) match, this makes the most sense. Since you want to make contributions right away, rather than deferring Roth money to the VSP, why not make the contribution to your Roth IRA?

That will eliminate an extra account.

For the 401(k), take a look at the costs and investment optiosn in the 403(b) vs the Traditional IRA you have.

Might make sense to roll the old 401(k) to a Traditional IRA instead of to the 403(b).

The BlackRock LIfePath fund you mentioned is relatively low cost, index based, diversified strategy.

It will have a lot of international, minimal small cap exposure and almost nothing in cash or bonds

[Author]

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