need advice

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fiverus
Posts: 91
Joined: Wed Jan 04, 2017 11:56 am

need advice

Post by fiverus » Fri Sep 29, 2017 11:09 am

Hello

Currently I have Fidelity account that I do not make any contributions. I make my contributions to my 401k 9% and company matches 5%=14%. I will retire in about 7-8 years. I'm in the process of paying off all my debt so I do not have any when I retire. I have a loan with with 401k intererst 4%, 7k left to pay ( bi-weekly money is taken out of my check). Then car loan as well. So, I am trying to save for emergency money (1,700k saved) and pay off debt at the same time.

What would you do with Fidelity account?

Fidelity account:
Roth: 12,804k
Trad IRA 17,722k

Thank you,

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Pajamas
Posts: 6015
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Re: need advice

Post by Pajamas » Fri Sep 29, 2017 11:25 am

I'm not sure exactly what you are asking, but I would keep the Fidelity accounts for retirement if you are wondering if you should cash them out to pay off debt. If that is not what you meant, be more specific about what options you are considering.

I have a rollover IRA that I haven't contributed to for years because I contributed to my 403(b) and Roth IRA instead. That's fine. I also had retirement and regular investment accounts even when I had a mortgage and prior to that when I had a car loan.

chevca
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Joined: Wed Jul 26, 2017 11:22 am

Re: need advice

Post by chevca » Fri Sep 29, 2017 11:28 am

What's the rate and how much left on the car loan?

With only $7k left on the 401k loan, there's not much interest left to pay... and you're paying yourself. I'd leave that alone, probably. The car loan could probably be left alone as well. Assuming it is a low amount and a decent rate.

It looks like you could dip into the Roth and take some contributions out to pay off the debt. But, surely you can pay off these two loans before you retire in 7-8 years? I would leave the Roth alone and call that part of or your actual emergency fund.

radiowave
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Re: need advice

Post by radiowave » Fri Sep 29, 2017 11:30 am

Depending on your marginal tax bracket, you may want to move the TIRA to your Roth, e.g. if in 15% bracket now, you can convert, pay the tax, then have the money in tax free account. If you are in a higher bracket now and anticipate being in a lower tax bracket when you retire, consider doing the conversion then if that fits with your overall plan.
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delamer
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Re: need advice

Post by delamer » Fri Sep 29, 2017 11:32 am

Pajamas wrote:
Fri Sep 29, 2017 11:25 am
I'm not sure exactly what you are asking, but I would keep the Fidelity accounts for retirement if you are wondering if you should cash them out to pay off debt. If that is not what you meant, be more specific about what options you are considering.

I have a rollover IRA that I haven't contributed to for years because I contributed to my 403(b) and Roth IRA instead. That's fine. I also had retirement and regular investment accounts even when I had a mortgage and prior to that when I had a car loan.
Yes, it depends on if you plan to hold onto the money for retirement or not. If it is for retirement, then you could roll the Traditional IRA into your 401(k) for simplicity's sake. Some use Roth IRAs as am emergency fund, since that money cam be accessed without penalty in many circumstances.

fiverus
Posts: 91
Joined: Wed Jan 04, 2017 11:56 am

Re: need advice

Post by fiverus » Fri Sep 29, 2017 11:47 am

How can I roll TIRA into my 401k? I think using Roth IRA as emergency fund is good idea.

Olemiss540
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Re: need advice

Post by Olemiss540 » Fri Sep 29, 2017 12:18 pm

fiverus wrote:
Fri Sep 29, 2017 11:47 am
How can I roll TIRA into my 401k? I think using Roth IRA as emergency fund is good idea.
You have to check your 401k plan documents to see if they allow incoming rollovers. They will have a form to fill out and then you contact your Tira provider to initiate the process. Make sure they send the check directly to your 401k provider FBO you.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Pajamas
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Re: need advice

Post by Pajamas » Fri Sep 29, 2017 12:25 pm

There may be some advantages depending on your situation, but I would be cautious about rolling an IRA into a 401(k) and carefully consider what investment choices are available in the 401(k) first. Some plans don't have good choices or at least not good ones with low fees.

fiverus
Posts: 91
Joined: Wed Jan 04, 2017 11:56 am

Re: need advice

Post by fiverus » Fri Sep 29, 2017 1:06 pm

My 401k is 3-fund portfolio. Is there a fee to transfer TIRA to 401k? or should I just leave it where it's at?

VG Total Bond Market
VG Institutional
VG Total Int'l

fiverus
Posts: 91
Joined: Wed Jan 04, 2017 11:56 am

Re: need advice

Post by fiverus » Fri Sep 29, 2017 1:07 pm

what does FBO you mean? stated in previous email.

chevca
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Re: need advice

Post by chevca » Fri Sep 29, 2017 1:14 pm

For Benefit Of, I believe.

It's just a terminology thing to say it's from them, but it's your money.

chevca
Posts: 1874
Joined: Wed Jul 26, 2017 11:22 am

Re: need advice

Post by chevca » Fri Sep 29, 2017 1:17 pm

Nice, simple looking 401k!

You would have to check your 401k rules. Not all plans are the same. Some don't even allow you to do a roll over like that. I'd be surprise if there was a fee, but who knows.

You would probably be fine leaving the TIRA where it's at. Fidelity is a good place and having options of where to take money from someday could be a good thing. It would be more for simplicity to have things in as few places as possible.

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