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Leaving job tomorrow -- 401k rollover question
Posted on 5/31/15 at 9:37 pm
Posted on 5/31/15 at 9:37 pm
I am leaving my job tomorrow and have about $80k in my 401k with this company. I was listening to Dave Ramsey and said that the best thing to do in a situation like this is a Direct Transfer. Does he mean transfer the money from the 401k to a IRA? If so, then how does that work because my 401k is pre-tax and an IRA is post-tax, so am I setting myself up for some headaches later in life?
Any assistance would be greatly appreciated.
Any assistance would be greatly appreciated.
4
Posted on 5/31/15 at 9:44 pm to CHiPs25
There are two types of IRAs. Traditional (pretax) and Roth (post tax). You want the former, unless you're willing to shell out ~20k in taxes.
Posted on 5/31/15 at 9:45 pm to CHiPs25
You can direct transfer it ti a TIRA with no tax penalty. Call Vanguard and they help you setup an account and walk you through the process.
Posted on 5/31/15 at 9:47 pm to lsufan1971
quote:
Call Vanguard and they help you setup an account
This seems to be the best idea. Thanks
quote:
lsufan1971
Posted on 5/31/15 at 10:00 pm to CHiPs25
I concur - call vanguard and roll with them...
Posted on 6/1/15 at 7:29 am to nelatf
I love Vanguard as much as anybody, but Chicken really should get some sort of kickback from them with all the business the MT sends their way.
Posted on 6/1/15 at 8:42 am to CHiPs25
Do you know what fees are you're paying in your 401k? People often roll over without first looking at what they're invested in and the fees that they're paying, only to roll over into an IRA, replicate the investments they had in the 401k, but at higher fees. Maybe your plan rules require you to roll out when you leave, but I'd check first. There are often advantages to staying in a plan if you can.
Posted on 6/1/15 at 9:04 am to Sigma
Chicken? What about our kick back???
Posted on 6/1/15 at 9:07 am to CHiPs25
Convert directly to traditional IRA. I use Fidelity and have never tried Vanguard.
Posted on 6/1/15 at 9:21 am to seawolf06
quote:
Convert directly to traditional IRA.
Is there no rollover limit to Traditional IRA's?
Posted on 6/1/15 at 9:30 am to CHiPs25
Not that I'm aware
It's not treated as a normal contribution
It's not treated as a normal contribution
Posted on 6/1/15 at 9:31 am to coolpapaboze
Depending on the new 401k, the fees could be even better and he could consider rolling into his new 401k instead of an IRA
Posted on 6/1/15 at 9:54 am to Croacka
Agreed. Rolling into an IRA seems to be everyone's initial reaction/preference but it isn't always the best option.
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