Should I roll over my 401K?

Question

I have a new employer and I'm elegible to roll over my 401K. At the moment I have my 401K with my previous employer and I can leave it there for as long as I want to. Due to my current credit card debt, I'm not planning to make any contributions. Please advise~

Answer 1

You have 5 options...

1. Leave it
2. Roll it over to your new employer if the investment choices are better and you want only one plan to monitor
3. Roll over to a Traditional IRA...more control and choices
4. Roll over to a Traditional IRA for now...then convert to a Roth IRA in the future when you get caught up on debt (will have taxes to pay - but get it tax free when you retire)
5. Cash it out to get your head above water (will have taxes, penalties, and by far not the best idea - but sometimes you have to do it)

Answer 2

Figure out how much tax penatly you will have to pay if you take it out and pay off your debt. You will need to figure out how much interest you are paying on your CC debt and how much interest and penalty you will lose by doing this.

Earning 6% in a 401k is worth less than paying 20% on a credit card.

Answer 3

Not necessarily. Check where the current 401K is invested and what the earnings have been. If good, leave it alone.

Answer 4

LOOK before you do anything...If you can leave it there at your
old job -do it- get yourself set and out of credit card debt then
maybe you can transfer it to your new job---don't take it out or you will pay 30 percent in taxes plus sometimes state also.

Answer 5

I roll over mine with my new employer as this was suggested by Fidelity agent.....you can ask your agent about the pros and con if you roll it over or if you just leave it as it is

Answer 6

I would roll it over into a Traditional IRA at Scottrade. You can invest it stocks, bonds and mutual funds, and will not be limited to on what investments your company offers.

Invest wisely though.