401k & IRA
I asked but cannot find the response so I’m asking again lol. My friend in Ohio has a 401(k) at his previous job and he’s not sure if he should move it to his new job or remove it and put it into something, like an IRA. I read your report on how a ROTH IRA is better, so can he take that 401 from his previous job and open it up with that? Simple I know but you may have an extra idea to put in. Thanks as always! I try to listen to you on the John Williams show and Lisa Dent.
Terry Says
OK, his first step is to do a direct rollover from the old d40l(k) plan to an IRA.Have your friend read this column: Rollover Now!
Once that rollover is completed per the instructions in the column, your friend should name a beneficiary for the account. And then, at that point, he or she might consider a Roth Conversion — which means he will have to pay taxes on the entire amount now, while future growth in the account will be tax-free. If they did the rollover per my instructions at Fidelity or Vanguard, they can help figure out if that’s a good idea.
