re: Rolling over 401K to new job

Your quote:

quote:

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ETA: Ever looked at a Roth balance vs a traditional IRA balance after 20-30 yrs?

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quote:

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So let's do a calculation. $20,000, 5% compounded annually for 30 years. If he rolls into a trad/401k he ends up with $86,438.85 If he rolls into a Roth and pays the tax out of pocket he ends up with $86,438.85 If he uses the balance and his tax bracket is 15% he ends up with: $73,473.02 Which is what I've been saying all along. You want to throw taxation into a discussion about balance. And you're wrong.

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I think most of the confusion in this thread can be seen above. I was wrong by using the term "balance" in this context. I was looking for a word to describe the amount of money in the account, comparing a lump sum rolled from a 401k into a tIRA/401k vs rolled into a Roth. The amount you would have, the balance in the account, (considering the cash outlay it the back at the point of conversion) when you start to withdraw, including the tax paid the following tax year on your return. This included two points of potential taxation, the rolling, and the withdrawing. It's hard to know exactly because no one knows the relative tax rates, but most assumptions end up with the Roth being the better option, especially if, like the OP, you've got a long time until retirement.

I'm sorry if this didn't come across in my posts.