Should I consolidate retirements and ROTH questions.

[28andlearning]

I currently have like 6 different 401(type) investments from past employers. My question is, is it ok/SMART decision to consolidate my funds in the other accounts with my current 401(b)?

I have around 20k all together including my current employer.

I just got a raise and contribute 10% to my 401k currently. My employer matches up to 3%, with 3% minimum being required to match.

My monthly bills are fairly low right now. Come March of next year I should just have a car payment and rent @ $725mo.

I have around $1500 of extra income after paying all monthly "required" bills.


With that information, my company also offers a ROTH option that I can contribute into... Is it ok to use my employer's ROTH option or should I look else where? I have talked with my current insurance company as I enjoy my agent and he has been great person to work with so far.

Thanks.

[disneysteve]

As long as the old accounts are all similar in nature, you can roll them over into an IRA with a low cost mutual fund company like Vanguard and consolidate them all in one place. That will make record keeping easier and likely lower your investment costs considerably.

I'll let someone else tackle the Roth 401k question.

[Petunia 100]

Originally Posted by 28andlearning

I currently have like 6 different 401(type) investments from past employers. My question is, is it ok/SMART decision to consolidate my funds in the other accounts with my current 401(b)?

I have around 20k all together including my current employer.

I just got a raise and contribute 10% to my 401k currently. My employer matches up to 3%, with 3% minimum being required to match.

My monthly bills are fairly low right now. Come March of next year I should just have a car payment and rent @ $725mo.

I have around $1500 of extra income after paying all monthly "required" bills.


With that information, my company also offers a ROTH option that I can contribute into... Is it ok to use my employer's ROTH option or should I look else where? I have talked with my current insurance company as I enjoy my agent and he has been great person to work with so far.

Thanks.

I would not roll my old 401ks into my 403b; I would roll them into a traditional IRA held with a quality, low-cost custodian. Vanguard is an excellent suggestion. Consolidating is an excellent idea. You reduce costs and simplify your finances. Win-win.

Do not open a Roth or anything else with your insurance agent. You will be in a variable annuity, because that is the only type of investment an insurance agent can sell you. Insurance companies are great places to buy insurance but terrible places to buy investments. Again, choose a quality low-cost custodian.

IMO, annuities inside of an IRA are obscene. I wish they were illegal. They benefit no one but the salesperson and the company selling them. They are of no benefit whatsoever to the person who buys them.

[28andlearning]

Thanks for the information. Just for other informational purposes, my current employer is with Vangaurd, I have a few other 401's through vangaurd as that is who they use. So would using my companies ROTH (Vangaurd) be a good idea? From your post I am assuming so.

Sorry, just wanted to be clear. Also, if I take them from a 401(a) (b) (k) etc to a ROTH are any penalties incurred? I have been post poning because I was unsure if a tax penalty would be incured from moving a retirement to a ROTH.

Thanks again!
Thanks again!

[28andlearning]

Thanks for the information. Just for other informational purposes, my current employer is with Vangaurd, I have a few other 401's through vangaurd as that is who they use. So would using my companies ROTH (Vangaurd) be a good idea? From your post I am assuming so.

Sorry, just wanted to be clear. Also, if I take them from a 401(a) (b) (k) etc to a ROTH are any penalties incurred? I have been post poning because I was unsure if a tax penalty would be incured from moving a retirement to a ROTH.

Thanks again!

[GREENBACK]

There are no penalties for moving your money from an old 401k to an IRA . You will also have many more great investment options with a IRA. In fact, All investment options are now available. I agree with Petunia 100. If you ask an insurance agent for investment advice he/she only has one answer. Their answer is an annnuity and it is wrong for the vast, vast majority of people. In your situation, it is definitely not the direction you want to go.

I like my insurance agent too but I only talk to them about insurance. If you go to an advisor make sure they are fee based and not commision based. You want someone working with your best interests in mind.

I have an IRA with Vanguard and have been completely happy with it but there are other options available that may suit you better.

[disneysteve]

Originally Posted by 28andlearning

Also, if I take them from a 401(a) (b) (k) etc to a ROTH are any penalties incurred?

You can't rollover your old 401k into a Roth. A 401k is a pre-tax investment. A Roth is a post-tax investment. What you can do is rollover the 401k into a traditional IRA. Then, if you wish, you can covert to a Roth. If you do that, you would have to pay the taxes due on the money. No penalty, just taxes.

[MonkeyMama]

Just to be clear - if you roll your money into your 401(b), you will be limited to employer's investment options, charged hidden fees, etc. I would absolutely not put all of my money into a 401 type plan, even if it was with Vanguard. You can roll everything into one IRA (Vanguard, or anywhere else) to simplify things. There is no limit to what you can invest in, and you can shop around to make sure fees are reasonable. (& you have the freedom to move your money at any time).

Contribute to a ROTH? Just depends on your tax situation and cash flow situation. IF you are in a low tax bracket and can contribute to retirement without the tax break, and are young (28?), the then ROTH option is a good idea. If you make six figures, you'd probably be better off taking the current tax break and contributing to the regular 401(b). In the middle, you might want to put 10% to your 401(b) - non-ROTH - and then fund a ROTH IRA in addition.