401K vs. Roth
Hi Terry. Real enjoy listening to you on WGN AM720. I will be retiring from the railroad in about 8 months after getting my full 30 years and I’ll be 63. I will have a pretty decent monthly benefit from the RRB, an additional monthly benefit from my company’s private pension where I was in management for 14 years and my company 401K through Vanguard. I also have bought into T-Bills and have mutual Funds set up through Fidelity. With all the money I have in my 401K, would it be wise to move all or a portion of my 401K to a Roth IRA, pay the tax penalties up front, there by not having to draw the balance of funds from my 401K for a while. What would the tax liabilites be it I was to execute this move. Thank you for taking the time to read and look forward to your comments.
Terry Says
When you leave your employment, you should rollover your 40l(k) to a traditional IRA. You can do that right at Vanguard. The reason would be to have a wider choice of more conservative funds in retirement.
But you don’t need to start RMDs for 10 years! Why pay the tax upfront now to convert to a Roth, when so much can change in future years?
