What type of retirement account should I be in?
I have a 401K and I'm switching jobs. Should I roll this into a Roth IRA or a traditonal IRA? I'm 23...
Asked By: TG - 10/28/2008
Best Answer - Chosen by Asker
Ideally, you will want to rollover to a self directed IRA without fees for set up, management, or transfer. While many people assume they can roll to an IRA and then to a Roth IRA, this does depend on your AGI whether or not it is allowed... More
Answered By: themtmfinancialgroup - 10/29/2008
Additional Answers (6)
Considering the Dem's are going to take it either way, it doesn't really matter.
Answered By: G-gal - 10/28/2008
You can't roll a regular 401(k) directly into a Roth - one is pretax money and the other is after-tax money. Start by rolling it into a conventional IRA.
Answered By: bud68 - 10/28/2008
As already suggested, I'd roll it into a regular IRA with a reputable investment firm. Then, if I could afford the immediate tax bite, I'd switch it to a ROTH IRA. At your age, a ROTH IRA would provide significantly better results by the time you retire. With a ROTH IRA, you pay taxes on the current balance and then... More
Answered By: Tomel - 10/28/2008
I recall something that indicated that you might be able to move some of it into a Roth IRA, but I don't think you can move an unlimited amount.
Answered By: Clark Kent - 10/28/2008
It depends... Do you want to pay taxes on the money now or later? Do you plan on being in a lower tax bracket when you retire or draw the funds out... More
Answered By: jerzii_giirl - 10/28/2008
You have to roll it over into a Rollover IRA first. Then you can transfer it to a Roth IRA. You can set up a plan to convert so much at a time, which will be tax efficient, because you have to pay taxes on contributions. You may also want to look into a high yield savings account for safety.
Answered By: Derek - 10/28/2008
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