Personal Finance (Not Investing) • Individual 401k to Employer 401k Rollover

I have an individual 401k with Vanguard with ~$60k in pre-tax money it. Vanguard is closing their small business and individual 401k practice.

A few points to understand-

• The account will move to Ascensus in July if I do nothing. Ascensus will charge $20 per participant and $20 per mutual fund going forward.
• This account balance represents a small percentage of my investable assets (<5%).
• I initially set up this account in order to zero out my traditional IRA so that I could make backdoor Roth contributions.
• At the time of forming the Individual 401k, I had some consulting income. I'm no longer earning income outside my W2 job and haven't made contributions to my Individual 401k in 2.5 years.
• The Individual 401k plan documents allow for in-service rollovers of any contributions and the earnings of those contributions if they have been in the account for more than 2 plan years. The entirety of this account balance qualifies.
• My current employer has a well managed 401k plan at Fidelity with very access low cost Vanguard funds. I can't think of a reason NOT to roll money into it.

I'd like to simplify my financial life and not have yet another account to manage at a new financial institution. My plan at the moment is to initiate an in-service rollover from Vanguard to my employer's 401k plan following all the usual rollover protocol- check made out to Fidelity/ My employers 401k name FBO me, etc, etc.

It's my understanding that afterwards I can elect to terminate the individual 401k. Vanguard sent me documentation that says "You’re required to file a final Form 5500 (Annual Return/Report of Employee Benefit Plan) with the U.S. Department of Labor after all assets are distributed from your plan. You may also file IRS Form 5310 (Application for Determination for Terminating Plan) to obtain written confirmation that your plan is qualified. For more information, consult a qualified tax advisor or visit irs.gov." I'll plan to do both if I terminate the plan.

Is there any conceivable reason why I shouldn't do this or anything that I'm missing here?

Statistics: Posted by KNomad — Fri Apr 26, 2024 3:22 pm — Replies 9 — Views 277

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