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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a 401k that I need to move from a company I left. It

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I have a 401k that I need to move from a company I left. It has about $30k. What are my best options? I don't see a rolling over to a new employer…My sense is to find a low/no fee index fund, I need to know my best options. What do you suggest

Megan C :

Hello and welcome, my name is XXXXX XXXXX I will be happy to help you

Customer:

I have a 401k that I need to move from a company I left. It has about $30k. What are my best options? I don't see a rolling over to a new employer…My sense is to find a low/no fee index fund, I need to know my best options. What do you suggest

Megan C :

How old are you? If you are under 59.5, moving the funds out of a qualified plan will cause penalties and taxes.

Megan C :

So, you will need to roll either to your new employer or to an IRA

Customer:

55. I plan to rollover. I do not have a new employer yet. How long do I have?

Megan C :

That's determined by your plan. You could keep the funds right where they are if they allow it.

Megan C :

Some require you to move in 60 days, or else they cut you a check for your account

Customer:

I am with XXXXX XXXXXcock. What is advantage/disadvantages to staying in the 401k vs. IRA?

Megan C :

XXXXX XXXXXcock wouldn't set the term - your employer's plan would.

Customer:

Ok. I think I can stay. What is advantage/disadvantages to staying in the 401k vs. IRA?

Megan C :

It really doesn't matter which way you go, IRA or 401(k) - they are both the same

Customer:

no guidelines or penalties, or traps to one over other?

Megan C :

No, there are the same rules. There's no penalty to go to either.

Customer:

roth vs regular?

Megan C :

If you go to roth, you will owe tax on the entire amount of the withdrawal

Megan C :

There's no penalty but you're taxed on the amount of the rollover

Customer:

long term what do you recommend?

Megan C :

I would recommend staying with traditional IRA, and then if you want a Roth open a roth and contribute to that separately

Customer:

Thats good advice. Would you recommend I stay with former employer 401k (If I can) or roll it over to traditional?

Megan C :

I would recommend getting an IRA, and that way you can contribute to it to each year and keep growing it. You can contribute to it, even if you are contributing to a new 401(k)

Customer:

Thanks. Any suggestions for a good. solid, low cost IRA?

Megan C :

I would suggest going with target funds which are funds created with the risk portfolio in mind for your retirement. They will end in the retirement year you plan on having

Megan C :

Vanguard has low fee target funds

Megan C :

How old are you?

Customer:

55

Customer:

better than an index fund?

Megan C :

Yes, let me find the target fund

Megan C :

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList#targetAnchor

Customer:

I see. Thanks. You recommend this over an index fund?

Megan C :

I do, yes

Customer:

Is all the "invest in gold" just hype or real?

Megan C :

I would not invest in gold in your IRA. If you are going to invest in gold, I would do so outside your IRA

Customer:

ok. thanks. I appreciate your insights.

Megan C :

You're welcome

Megan C :

Is there anything else I can assist you with today?

Customer:

Better to make change before end of year or does it matter?

Megan C :

It really doesn't matter when you make the change because it will not impact your taxes

Customer:

ok. That's it. Appreciated

Megan C :

Ok thanks. If you would, please rate me positive so that I can receive credit for assisting you today

Customer:

I will. Last question…with Vanguard, can I make some individual stock decisions and it stays in my IRA?

Megan C :

Yes, you should be able to do that

Customer:

great. Have a good day.

Megan C :

You too

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