When rolling over a 401k, where should it go?

Question

Options are new employer's 401k or an IRA. What are the pros and cons of each? Somebody told me that you could take money out of a ROTH IRA for non-traditional investments, like to buy property or a business. Is this true?

Answer 1

There is more flexibiliity in early withdrawals from an IRA, especially a Roth IRA, than with a 401K.

Answer 2

For most 401k's, you can just leave it where it is. The only reason you would want to roll it over is if you don't like the investments. I have an old 401k and it is doing fine. It is managed by Fidelity and I like the investments so I just left it there . There is no law that says you have to roll over.

Most plans will not allow you to roll the money into your current 401k because all companies have there own policies about how the 401k is structured. You could put it into a traditional IRA and make the investment decisions yourself.

good luck

Answer 3

Yes you can withdraw money that you invested but not the gains made by your investment until 591/2. You already paid taxes on the money you put in your Roth IRA, so you can get it without penalty.

Answer 4

i put mine in an ira i made more in 1 year than i would have at an employers 401k because you have control of where the money goes and how fast to make it