I have a 401k should I roll it all over to my roth ira or use part of it to pay off my credit card debt?
453876
First be careful of "rolling" any money without checking the tax consequences of the event. The IRS will get the money one way or the other-make sure it doesn't happen too early or for the wrong reason. Using the 401k to pay off debt should only be done if you can absorb the early withdrawal penalties ( taking contributions prior to age 59.5 for reasons such as credit card debt are subject to ordinary income tax plus 10%- you could potentially lose 50 to 60 percent of the withdrawal off the top) \n\nThe Roth IRA is a good product for retirement, however there may be other avenues you could go with money (depending of what you want out of your investment portfolio) that would not result in certain tax consequences and allow access to your money.\n\nemail me with further questions - i deal with these situations on a regular basis\n\ntake care
1057768
PUT IT IN A ROTH IRA. I just took a dave ramsey course in school and if u have any other info ask me.. i have an easy to read book on all money questions
1182485
Ahhh, the million dollar question for Roth accounts...\n\nAnd the answer is - it depends (sorry). Unfortunately, you need a crystal ball for this one. Your decision will likely come down to what you believe the future holds. You need to consider several factors, but you basically have two courses of action to take. \n\n1) Take the sure thing - Contribute to your Roth 401(k), paying tax upon the contributions at your current income tax bracket.\n\n2) Let it Ride - Contribute to your Regular 401(k), defer taxes upon that income, and enjoy tax-free compounding of interest until you are able to take a qualified distribution (usually at retirement) at which time you will pay taxes on the principal and earnings at your future income tax rate.\n\nI suppose a third option would be to hedge your bets and contribute some money to both accounts so that you have some tax-related diversification in your retirement account (but let's not get that technical).\n\nSo, look into your crystal ball...\n\nDo you believe that you will be in a higher tax bracket at retirement age than you are right now? If so, the Roth option may be the right choice for you as you will likely pay less in tax today than you would years from now in retirement. Likewise, if you believe you will be in a lower tax bracket in retirement, it makes more sense to simply contribute to your Regular 401(k), enjoy your tax deferral over the years, and pay the piper upon retirement.\n\nThere are several wild cards to consider in this scenario, not the least of which is the possibility that tax brackets change. If you want my honest opinion, I think it is naive to assume that the historically low tax brackets we enjoy today will be around in 20 or 30 years. I am 31 years old and, without getting political, just look at the current landscape of our country and its budget deficits. The cost of wars, strains on social security from aging baby boomers, etc, leads me to believe that the government is mortgaging our nation's current problems and our generation will likely have to pay for it. And how will we pay for it? Higher taxes. All things being equal, if I were you and I had more than 15 years or so until retirement, I would opt for the Roth 401(k).\n\nBy the way...depending upon your plan's provisions, if your employer matches contributions to your Regular 401(k) plan, then you should still qualify for the match, regardless of whether you contribute to the Roth 401(k) or your Regular 401(k).  I think some of the other answerers on here were getting confused by your question - comparing a Roth IRA (not a Roth 401(k)) with a Regular 401(k).
816615
I would not stop funding the 401K all together but you could split the difference, make sure you are catching everything that your employer will match (no need to throw away free money) if you were  investing more then that cut it back and use the extra to pay your bills off faster but commit to this and follow though. this is going to be tough, Good luck!!
585907
If you are carrying any credit card debt pay that off. You will earn an instant 18% (or whatever rate the card carries.)\n\nIf you are not carrying any credit card debt then I would say any index mutual fund.\n\nfinance.yahoo.com has a mutual fund screener that will let you filter for funds with a minimum initial investment of $100 or less.
4641
yup, unless you're 59 and a half, then you will have to pay the full tax on the money taken out of your 401k plan, which means if you are working right now, you are in your income earning years, hence your tax bracket should be higher, maybe even to the next level depending on how much you take out of your 401k, since that would be counted as regular income.  and the IRS (uncle sam calls it a penalty, but I like to call it a tip) would also be needing that tip from you, a 10% tip for every buck you want to take out.  so, if you take 20,000 out, that would be more like 14,400 if your bracket is in the 28% range minus $2000 for that tip i would telling you about, which leaves you 12,400 for taking out 20,000.  not really worth it huh
320520
Absolutely though, you would need to check with a tax professional to determine whether the amounts deposited into your IRA are tax deferred or after-tax.  It all depends upon your income level.\n\nMax out your 401(k) contributions if at all possible. You're overall savings through the 401(k) far outweight the ultimate reduction in your "cash in hand" each pay check.
62750
if you have a roth and you are no longer working for the company that started your old 401k then roll your 401k into the roth. but if you are with a company and they can match your 401 then keep it
524763
Under IRS rules, you can only roll over a 401k into a Traditional IRA and wait at least one year before moving it into Roth IRA. Remember, 401k sitting in previous employers will not have any growth. It is a frozen account until you roll it over.\n\nIRAs are always a good plan to save for retirement. You can pick any mutual funds that is offered by a financial institution (most mutual funds require a minimum initial deposit of $1000). And can be tax free after age 59 1/2 when you start using it.
107410
No!! You should never take money out of your 401k for any type of bills. The only time you should ever consider it is to get out of a foreclosure. Get on a budget and spend every dollar. Starting with shelter, lights, food, and then gas for your car. Now you have your basics covered. Next list your debts smallest to the largest. Pay the minimum payments on the larger debts and pay extra on the smallest one. Remember in the cartoons when they dropped a pebble in the snow on the side of a mountain? You got a snowball that started to get bigger and bigger. That what you'll be doing if you start this way. You'll pay off one debt and then take that payment and apply it to your next smallest debt. Just repeat the process after you get that one paid for. You'll be out of debt in no time. Good Luck!!
384050
If you take from your traditional you pay tax on it.  If you take from your Roth you do not.  This is why you would want your CPA to review your tax situation.  Maybe they will suggest a combination depending on your tax bracket and how close you are to the bracket.
946699
If you have that much saved up, it's time to start rebuilding your credit first.  Ultimately it can save you tens of thousands of dollars in interest, so it's the smartest thing you can do.  Go find a local credit union and get some credit going.  If you put your money with them, they can give you secured credit cards and loans, at good interest rates.  Go to annualcreditreport.com and learn about how to use credit.  Ask the officer at the credit union for advice.  \n\nStart off easy, don't lock all your money into a Roth IRA or anything that you can't access at least half of your money with little to no penalty, in case of emergencies.  You've been through hell once, last thing you want to do is lose 25% of your money to the IRS for shutting down your IRA early if something bad happens.\n\nThe credit union will probably advise you to use a laddered CD system for the bulk of your money.  $5K, in a 6 month CD, 12 month, 24 month, you get the idea.  Keep $5K completely liquid, then at least you only have a couple months before your next CD is ready to come available if you need access.  \n\nDo this for a couple years while you rebuild your life.  As long as you have some money locked up with the credit union, they will lend it back to you and give you access to the cheap credit you need to get back on track.\n\nEventually, you will want to look at other investments.  Start with taking advantage of any company match in a 401K, then start looking at IRA's and no-load index funds.
988055
Boy, I would really avoid that if you can. The withholding isn't really up to you. They are going to keep 30 percent if the principal is before-tax money (in a Roth) and 30 percent of the profit if it is after tax money (in a traditional). But the penalty is so severe that you ought to consider doing other things (second job or whatever) to avoid the hit and the loss of your compounding if you possibly can. $1,000 left alone for 40 years will grow to more than $100,000 in a growth stock fund.
123484
I agree, A ROTH IRA makes more sense in a lower-middle class income situation.  You don't really need an income tax deduction right now.\n\nThere IS a reason to open a traditional ira, however.  If you were in a high tax bracket, you would be able to lower your reported income by $4,000 this year (or $5,000 if you are over 50 years), thus potentially lowering your tax bracket.\n\nIf you have a 401k at work, ask about the brand new ROTH 401k, which puts after tax money into a 401k for you.  Again, this would be perfect in your situation, since you could put away more than $4,000 (up to $15,000 this year) and the money would come out tax free at retirement, when you could potentially be in a higher tax bracket.
956365
First, I would pay off all high interest debt.  Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay. \n\nNext, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be. \n\nInvesting in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser, if you have one. You may also be able to invest in mutual funds via a 401K plan at work. (The Air Force has a Thrift Saving Plan or TSP which is similar to a 401K)  When you get out, consider buying a house instead of renting. It will save you a lot of money in the long run in rent you don't have to pay.\n\nBelieving advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial adviser. They will charge you significant commissions, however.
590303
If you have your mortgage paid, then you'll have all the interest paid as well. That's a good thing. But if you have credit card debt, go after that first. More than likely it's 4 or 5 times the interest rate on your mortgage.
1016477
Okay, you want to take some $ out & roll over the rest, right?  You get 60 days to roll over your 401K into an IRA or other employer (if your new employer allows this).  So you could partially withdraw what you need for bill to yourself & roll over the rest.  Early withdraw penalties are pretty stiff 10% penalty on $ taken out PLUS it is reported as regular income, keep that in mind.\n\nIf the former employer doesn't allow partial withdraws, then you could take the lump sum payable to you.  They will immediately penalize the 10% PLUS withhold around an additional 20% (~ 30% total) for anticipated taxes.  The only good news for this option: you should get a refund (if all else stays the same) because too much was withheld, IF you put back ALL the $ you withdrew from the 401K within the 60 days into the new IRA or new employer-sponsored plan.  Downside to this: you'll need to have $ laying around to make up the difference that was originally withheld from the old employer to fund the new IRA.\n\nThe less painful way is to do a partial withdraw if the old employer will allow this.  You can also leave the old employer $ with them if they (old employer plan sponsor/administrator) allow this.\n\nHope this helps.