After getting laid off from my previous job I initially thought I would remove the money from my 401k to cover any expenses that would come. But then I reminded myself that I'm not going to do this anymore unless it's an emergency.

Considering that the last few years of filling out tax returns has resulted in me paying out instead of getting a refund, I figured that would constitute an emergency and was prepared to get the money out of my 401k for that reason and that reason alone. However, a new day brings new situations.

Last week I was hired onto a job only because someone else declined the position, thus freeing up a space for me in the training class. Thank you anonymous person! Now I am able to keep the money for retirement and move it over to the new 401k at my current job.

But in the process of trying to figure out the steps in moving the money,  I had two choices given to me. 1) I move the money to the new 401k or 2) I move the money to an IRA. Not knowing which is better for my situation I did some research and came to a conclusion. (h/t to Gen X finance for help)

Flickr/CC - MJTR (´・ω・)
Non-Matched Money But More Variety - That was repeated over and over. IRA isn't matched money but it is a bigger variety of funds to choose from. However, if I move the money over to the new 401k, that isn't matched either, only the new money I put in is. And as for variety, giving me 29 varieties of ketchup isn't worth more to me than 6 as I know what I like and it's very simple. The same goes for fund variety, I look at the basics, fees, etc and go with what is available. The nice part of the new company 401k, they do have a better variety than the old company.

Lower Fees in an IRA - When I invest in my own 401k I look for the lowest fees as my top 3 things to do. In most all cases I don't have any trouble finding fees that are around .55% or lower. To me that savings of .55% (at most) with the little bit of money I have now doesn't seem impressive enough to me to deal with two retirement accounts. Plus there isn't a fee to rollover from one 401k to another.

This is the first time I have rolled over money from one account to another and that alone makes me happy. Before I have been too short-sighted to see beyond the immediate gratification that cash provides, but with experience comes some learning.

Since this post was short, I thought I would point you to a few articles I have saved.

** This is a pdf document that gives 10 steps to haggling. It is from a UK site, but isn't the idea of haggling universal anyway? My favorite one I need to remember is #2 It isn't about price: don’t look purely at the financial saving – instead think added value

** Did you watch that show on TLC called "Extreme Couponing" in between the shows about people eating laundry soap and hoarding? I'm glad I saw it after I read Denver Bargain's write-up on it, Extreme Couponing Meets Extreme Production in Reality TV, otherwise, I would have been talking to my tv set.

** If you are in need of a few new books to put on hold at the library, you will want to check out  38 personal finance bloggers favorite books that Planting Dollars gathered. It even has a little graph to boot. My response was the book, Living More with Less (not the cookbook) because it helps me appreciate the luxuries that I have and that there is so much more I can do without if I truly need or want to. We are a very blessed country and having a comparison to other countries certainly brings that out.

** One final link of self promotion - Sam McManis from The Sacramento Bee interviewed me about my thoughts on frugal and cheap. Spelled my name wrong, oh well, article is interesting about the new California Governor taking away state workers cell phones.


  1. Jill // Monday, January 31, 2011 7:31:00 AM  

    Congrats on the job and the interview!

  2. Michelle // Monday, January 31, 2011 1:14:00 PM  

    We took an early withdrawl off hubby's 401K after a layoff, but it came back to bite us. They took a lot of fees for early withdrawl, and then we got a 1099 at tax time so we had to declare the withdrawn amount as income. It was just enough to puch us to a higher income bracket and we lost some of out return amount (for that year). Always read the fine print!!

  3. Ryan // Tuesday, February 01, 2011 8:07:00 AM  

    Thanks for the mention and responding with your book choice! glad you liked the little graph too ;)

  4. Dawn // Friday, February 04, 2011 6:27:00 AM  

    I fully understand - the similar things have happened to me when I got severance checks and took money out of 401k before.