As others have said, however you put the money into the account - pretax or Roth is going to determine your rollover options.
Look into fees and investment options before doing anything unless you have to due to a force out rule. Rolling into an IRA makes sense if you want more investment options as you can buy pretty much anything. But fees can be higher depending on where you get your IRA from and what investments you pick.
Rolling into your new company's 401(k) can actually make sense if their plan is well run, has good investment options and low fees. Keep in mind that rollover money is always separated from your regular contributions so it's not subject to the same vesting rules and if you change your mind down the line, you typically can roll it back out into an IRA. Sometimes a large company's 401(k) plan can have much lower fees on funds than an IRA due to the plan's size. Where we are, the expense ratios are in the single digit basis points (under .1%). That's hard to get even with low cost funds like Vanguard.
Just don't let anyone talk you into anything, especially if they have a financial incentive. There are lots of stories lately showing how people would have been better off leaving their money in a 401k vs. rolling it over to an IRA.
Quote:
Originally Posted by Whostheboss
There are plenty of threads on this topic but i need a quick answer, i don't want to scroll through pages and pages.
I left my old company and i have some money saved up in my 401k, i'm fully vested in all the money in there.
Question: Should i roll into IRA? Roth IRA?
or
Should i roll into my new jobs 401K? (this is highly unlikely)
Thanks
|