I've been contributing to my 401k that has about 40k in it right now, and now I'm going to a different company. What do I do? Some people have told me not to transfer the money to the new company's 401k, and instead to open an IRA. Any thoughts?
You might be better off with a Roth IRA, you pay tax on the money that u just bring in initially, and after that it can grow tax free, also u will not have any penalty if u withdraw it after 5 years. Do the 401k to Roth IRA conversion in the year that u estimate ur income would be lesser, so that u fall on a lower tax bracket.
IRA
If you’re happy with the investment options in your current company you can leave it there indefinitely. If the new company has better investments options, you can roll it over to the new 401k. You can also transfer it over to a Rollover IRA if you want more control of investment options. Furthermore, you can convert it to Roth IRA, but you’ll have to pay taxes on the amount. If you want to do backdoor Roth IRA, your best bet is to leave it in current 401k or transfer to new 401k account
Check expense ratios of the investment options against similar funds you'd buy independently. Sometimes a plan has better rates and it makes sense to stay.
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You can’t do the backdoor Roth IRA if have money in your regular IRA