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!
To submit your questions: Email me at financial.focus@yahoo.com
For my fellow bloggers: Feel free to use the comments to post questions or add useful tidbits.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment