New Invester Question

[clebertl]

Hi there,

I'm new to the forum for forgive any misconceptions I may have. Here is my situation:

I have a new 401K with about $800.00 that I am about to rollover into a Roth IRA. I can't make up my mind whether I want to go with T Rowe Price or E-Trade. I would like to self direct the stock and funds in my account. I am about to receive funds of about $7000.00 at the end of February that I can add to the account or invest into another account. I can add about $50.00 a month - I am recently unemployed, but have a small military disability check I get once a month.

I am married, file jointly with my spouse and we are both 45 years old.

Is my logic sound or does anyone have any suggestions.

Thanks,
TLC

[disneysteve]

I have a new 401K with about $800.00 that I am about to rollover into a Roth IRA. I can't make up my mind whether I want to go with T Rowe Price or E-Trade. I would like to self direct the stock and funds in my account. I am about to receive funds of about $7000.00 at the end of February that I can add to the account or invest into another account. I can add about $50.00 a month

You might be confusing a couple of different things here so let me try to clear it up.

You have a 401k from a former employer that you want to roll over into a rollover IRA.
You can't roll it into a Roth IRA, or at least not directly, because a 401k is a pre-tax account and a Roth is a post-tax account. You could do a rollover IRA and then convert that to a Roth, which would involve paying the taxes on the account.

Whether you go with T. Rowe or E-trade really depends on how you intend to invest the money. If you are going to go with mutual funds, T. Rowe, Fidelity, or Vanguard are all great choices. If you want ETFs, I'm not familiar with T. Rowe's offerings so I can't answer that. If you want individual stocks (which I don't recommend for your retirement account), check on T. Rowe's commissions vs. E-trades.

Then you said you'll be getting $7,000 next month that you can add to this account. Are you sure about that? Is that also retirement money? If it is from some other source, you may not be able to co-mingle that money.

You also said you can add $50/month to this account. You said you are unemployed, meaning you have no earned income. You may not be able to add to an IRA or Roth IRA unless you are doing it as a spousal IRA and your wife is still working, but you didn't give enough info to answer that question.

[MakeAStash]

Based on good and bad experiences with customer service, I prefer any of Fidelity, Vanguard or Schwab instead of TRPrice or etrade.