Traditional 401k versus Roth

[CRFSaver]

http://fc.standardandpoors.com/srl/a...8&catid=000575

Nice tool to determine which one is best for you...

[Ima saver]

Neither my husband or I have ever worked any place that offered a 401k.

[Tree0164]

Good tool-for my husband it will be better for him to do the Roth 401k but his employer doens't offer it at this time.

[sweeps]

The question is what do you enter for the assumptions?

[jmjj215]

Oh bother Sweeps. Just assume a 12% return and forecast away! Sheesh.......

[CRFSaver]

I assumed a lower tax rate when I retired which is a pretty good assumption, a 8% return as that is what I have been averaging right now, a 5% return in retirement and I am in the highest tax braket already. I am better off in a traditional 401K.

[tagrims]

In a roth IRA do you get penalized if you sell a mutual fund and buy a different one?


For instance, I just invested $3,000 in Vanguard's Total Stock Market Index Fund, but say 20-30 years down the road I want to switch all the money that has been accumulated over to a Bond market fund do I have to pay taxes because I didn't keep it in the original holding?

[Ima saver]

No, you can roll over a roth ira to anything else. Let the mutual fund handle the roll over and don't take the cash out yourself. As long as you don't take the money out, you are ok. Just do a roll over. I started with a bank Ira, then rolled into a mutal fund called mutual shares, then rolled it into Vanguard 500. You made a wise choice.

[PRICEPLUS]

Roth is the way to go for me.

I think tagrims might have been referring to within the 401(k) as opposed to rolling it over if leaving the job.

I know my company does not charge me any commissions or fees when I sell one fund and buy another within the plan. I can swap around till my heart's content (I have no doubt it's costing them, but it doesn't cost me). in addition, all but 2 of my available funds have loads too so this is a good deal for me (the loads being waived that is).

but, is it this way because of the regulations in section 401(k) of the tax code or because my employer just wanted to do it? that I don't know.