Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.

~William A. Ward

Friday, February 1, 2008

Question: Email your questions to or leave a comment!

Question: I just started my new job and my new employer will not match my contributions for another year. Should I still contribute to the 401k?

What should I do with my 401K from my old employer?

Since they aren’t matching your contribution it might be wise to put the money into a Roth Individual Retirement Account (IRA) for the time being, you will have a better selection of funds and it will help diversify your retirement monies, as you can withdraw funds from your Roth tax-free during retirement. Since your contributions to a 401K will be ongoing. You will mass a substantial amount of 401K funds that WILL be taxable during retirement. Contributing to a Roth and a 401K will give you the diversity of having tax-free and taxable funds to withdraw from during retirement.

As far as your 401K from your past employer: You can do a 401K rollover into an IRA at a brokerage such as Vanguard or Fidelity in which you can mange the funds yourself. If you don’t feel confident in managing the mutual funds on your own, you can contact a fund company or even your local Bank to have it actively managed. Personally I would roll them over into an IRA at Vanguard and pick a diverse group of funds. The rollover process is really simple and the Vanguard Customer Service team can help you if need be. I rolled over an IRA that I started in college into some Vanguard funds because I wasn’t getting a good return with the Bank and I just picked a few funds and “let it ride”.

If you need help picking funds let me know!

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For my fellow bloggers: Feel free to use the comments to post questions or add useful tidbits.

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