401k advice

[MarkMark]

Hi,
I am in the process of switching job. With my current employer, my 401k is making me a good return ( about 14%) and dividend. After switching job,
1) can I leave this 401k account? Even if I am not contributing to it; and for how long?
2) if I moved it, which one is better. Moving it to Roth IRA, or to the new employers 401k?

Thanks for any advice

[autoxer]

The return is based on how it is invested and how high the fees are. If you look at how it is invested, you can create a similar portfolio anywhere.

1) depends on how the old plan is setup. The rules for how long it can stay are written by the company that created the plan.

2) if your new employer offers a good fund selection and low fees, than that is a fine place for it. If your old plan is a ROTH 401k, then it would make sense to roll it into a ROTH IRA, but if it is a traditional 401k, then you may want to consider a traditional IRA. A rollover from a traditional 401k to a ROTH IRA will increase your tax bill as if it was all income.

[krantcents]

If you rollover your 401k to an IRA, you will have a lot more choices including what you had. Converting it to a Roth will create a tax liability for you. If you want to convert, you should pick the time when you have the lowest income.

[BadSaver]

In general:
401k to IRA = rollover
IRA to Roth = conversion (taxable event)

I'd rollover to a low cost investment service like Vanguard because I like control and flexability regarding my finances.

[feh]

In general:
401k to IRA = rollover
IRA to Roth = conversion (taxable event)

I'd rollover to a low cost investment service like Vanguard because I like control and flexability regarding my finances.

+1

The chances of the 401K having lower expenses and better investment options than an IRA at a major brokerage (Vanguard, Fidelity) are just about 0%.

Roll it over to a traditional IRA.