Rollover 401(k) to Roth IRA. Which company?

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MexiPino
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Rollover 401(k) to Roth IRA. Which company?

Post by MexiPino » Fri Oct 06, 2017 12:15 am

I have a 401(k) account from a former employer that I want to rollover to a Roth IRA.
I'm completely new to the world of investing and I'm trying to decide which company I should move my money to.
I've been recommended E-Trade and Vanguard.
I don't know think I'm ready to get to deep with my investments just yet, as I need to learn a lot more about this before I start making big moves.
But just wanted to hear some suggestions on what companies I should look at to rollover my money.
Thanks!

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Majormajor78
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Majormajor78 » Fri Oct 06, 2017 8:07 am

It usually goes from a traditional 401K to a traditional IRA; or a Roth 401K to a Roth IRA. Any place you roll it into should be able to take care of this pretty easily.

You want to look for a brokerage house that has decent costumer service, low expenses, and no transaction fees for the funds you want. Charles Schwab, Vanguard, Fidelity, and others all has good low cost index funds among other brokers. I use TD ameritrade that has a no transaction fee ETF program. Between 401K's and IRA's I have accounts at all of the places I listed and am more or less satisfied with them.
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FiveK
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by FiveK » Fri Oct 06, 2017 1:15 pm

Majormajor78 wrote:
Fri Oct 06, 2017 8:07 am
It usually goes from a traditional 401K to a traditional IRA; or a Roth 401K to a Roth IRA. Any place you roll it into should be able to take care of this pretty easily.
+1

OP, in case it isn't clear why above is the "usual": a rollover from a traditional 401k to a Roth IRA is taxable income while traditional to traditional, or Roth to Roth, is not.

MexiPino
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by MexiPino » Fri Oct 06, 2017 1:33 pm

Thanks! I have an understanding of the process now.
Just trying to decide where to move my money to. Both Vanguard and E-Trade were recommended to me, but still doing research.

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Earl Lemongrab
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Earl Lemongrab » Fri Oct 06, 2017 2:21 pm

How much would be in the rollover? I like to get paid when I move money, so I would look for a bonus. There are various options there, some work best for smaller amounts, some for larger.

For more information on bonuses see: The Final, Definitive Thread on Brokerage Transfer Bonuses
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MexiPino
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by MexiPino » Fri Oct 06, 2017 2:27 pm

Earl Lemongrab wrote:
Fri Oct 06, 2017 2:21 pm
How much would be in the rollover? I like to get paid when I move money, so I would look for a bonus. There are various options there, some work best for smaller amounts, some for larger.
$75k

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Earl Lemongrab
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Earl Lemongrab » Fri Oct 06, 2017 11:41 pm

MexiPino wrote:
Fri Oct 06, 2017 2:27 pm
Earl Lemongrab wrote:
Fri Oct 06, 2017 2:21 pm
How much would be in the rollover? I like to get paid when I move money, so I would look for a bonus. There are various options there, some work best for smaller amounts, some for larger.
$75k
Etrade, Capital One, and TD Ameritrade will give $200 for that amount.

https://us.etrade.com/home
https://content.capitaloneinvesting.com ... rcomm/odm/
https://www.tdameritrade.com/offer/for90days/index.html

Merrill Edge had an offer that would give $250 but that ends today.

If I had to choose one of these, I would go with TD Ameritrade.
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BL
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by BL » Sat Oct 07, 2017 6:56 am

I would suggest Vanguard as they have excellent balanced funds that require no effort on your part, since you sound like you may lack confidence at this point. Decide what % stocks/bonds you need and find a Life Strategy, Target date fund, or Balanced funds that suits your needs. You could also go with the PAS managing your funds for 0.3%/year if you want assistance that won't lead you into expensive choices. The next slightly more complicated choice would be to look at a 3-fund portfolio (see Wiki or thread here).

Changing around often for a bonus is fine if you enjoy doing that, but a newbie could mess that up or lose a bonus amount during a transfer somewhere along the line very easily, as the market jumps around. That is why I prefer to decide what is best and just follow through. If you ask for advice, you may get recommended a more expensive product or management than you would find at Vanguard. If you know exactly what you want, then any of the low-cost brokerages probably would work fine.

Do you have good choices in the 401k? There is generally no requirement that you move them. Some roll over to a current 401k if that is a good one. If your income is too high to do Roth IRA contributions, you would do better without a traditional IRA. Were you planning to pay taxes to convert to Roth or is the 401k already in a Roth? In other words, there is probably no rush to move if you have a good plan where it is now.

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ruralavalon
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by ruralavalon » Sat Oct 07, 2017 7:39 am

I suggest using Vanguard for a rollover IRA, they have by far the largest selection of low expense ratio mutual funds offered anywhere.

Fidelity and Schwab would also be reasonable as long as you stick with their low expense ratio index funds.

If there is a good selection of low expense ratio funds offered in the 401k at your current job, and if that 401k will permit a rollover from your old 401k, then that might be a good choice instead.
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PatrickA5
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by PatrickA5 » Sat Oct 07, 2017 8:47 am

Earl Lemongrab wrote:
Fri Oct 06, 2017 2:21 pm
How much would be in the rollover? I like to get paid when I move money, so I would look for a bonus. There are various options there, some work best for smaller amounts, some for larger.

For more information on bonuses see: The Final, Definitive Thread on Brokerage Transfer Bonuses
Just curious. How do bonuses in IRA's work. Do they just add money to the IRA - which I assume would make it not taxable currently?

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Earl Lemongrab
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Earl Lemongrab » Sat Oct 07, 2017 9:53 am

PatrickA5 wrote:
Sat Oct 07, 2017 8:47 am
How do bonuses in IRA's work. Do they just add money to the IRA - which I assume would make it not taxable currently?
Most do. They count it as bonus earnings.
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PatrickA5
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by PatrickA5 » Sat Oct 07, 2017 10:43 am

Earl Lemongrab wrote:
Sat Oct 07, 2017 9:53 am
PatrickA5 wrote:
Sat Oct 07, 2017 8:47 am
How do bonuses in IRA's work. Do they just add money to the IRA - which I assume would make it not taxable currently?
Most do. They count it as bonus earnings.
So, they count it as earnings in the current year? Does that make it an "after-tax" contribution of some kind within the Traditional IRA?

Helo80
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Helo80 » Sat Oct 07, 2017 11:05 am

MexiPino wrote:
Fri Oct 06, 2017 1:33 pm
Thanks! I have an understanding of the process now.
Just trying to decide where to move my money to. Both Vanguard and E-Trade were recommended to me, but still doing research.
The usual order of recommendations are 1. Vanguard, 2. Fidelity, and 3. Schwab.

For index funds, all are about the same expense wise. Fidelity and Schwab would be more likely to have a field office in your geographic region. But, there is really no need for a field office in 2017 unless you are unable to get a medallion signature for future money transfer purposes.

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Earl Lemongrab
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Earl Lemongrab » Sat Oct 07, 2017 11:52 am

PatrickA5 wrote:
Sat Oct 07, 2017 10:43 am
Earl Lemongrab wrote:
Sat Oct 07, 2017 9:53 am
PatrickA5 wrote:
Sat Oct 07, 2017 8:47 am
How do bonuses in IRA's work. Do they just add money to the IRA - which I assume would make it not taxable currently?
Most do. They count it as bonus earnings.
So, they count it as earnings in the current year? Does that make it an "after-tax" contribution of some kind within the Traditional IRA?
No, it's pretax in a TIRA, non-taxable in a Roth. Just like regular earnings. Think of it as some extra interest or dividends on the investments. For most custodians it's not a contribution of any kind. A few do count it as a contribution, but I avoid those for tax-advantaged bonuses. A few won't put it in the IRA, but in an outside account.
Last edited by Earl Lemongrab on Sat Oct 07, 2017 1:03 pm, edited 1 time in total.
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retiredjg
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by retiredjg » Sat Oct 07, 2017 12:02 pm

MexiPino wrote:
Fri Oct 06, 2017 12:15 am
I have a 401(k) account from a former employer that I want to rollover to a Roth IRA.
This is generally not a good idea because that $75k will be added to your taxable income. Even if you have the money in savings to pay the extra tax on $75k, it may not be a good idea to do this at this time.

If you just want to roll it somewhere, put it in a traditional IRA or in your current 401k if it has good choices. Would you like some help deciding if your 401k has good choices?

I'm completely new to the world of investing and I'm trying to decide which company I should move my money to.
This depends on what you want to buy and partially on your level of experience. Vanguard, Fidelity, and Schwab (more for ETFs than mutual funds) are all good choices.

I don't know think I'm ready to get to deep with my investments just yet, as I need to learn a lot more about this before I start making big moves.
You do need to consider what the investments will be ahead of time. Maybe that is what you should be look at first.

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Earl Lemongrab
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Re: Rollover 401(k) to Roth IRA. Which company?

Post by Earl Lemongrab » Sat Oct 07, 2017 4:20 pm

BL wrote:
Sat Oct 07, 2017 6:56 am
Changing around often for a bonus is fine if you enjoy doing that
No one, and certainly not I, suggested that the OP or anyone else move around to chase bonuses. This is like someone getting their first credit card. Might as well get a bonus doing it. If someone wants to spend the time generating bonuses, then that's a fine pursuit as well. But not the point or intent of my post.

Personally I think, regardless of bonuses, that one would be better off at TD Ameritrade or Merrill Edge using Vanguard ETFs.
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