401K, IRA, IRS, BOV, DOHC, etc.

[Eye of the Tiger]

So, I need to figure out what to do with my old 401K. It's just in a few mutual funds that I picked, and it's good. Problem is, the conpany that manages it is sketchy. I called them up, and they couldn't even tell me how much was vested or really anything. I don't want to cash it out, but I might. 10% penalty on top of taxes and processing fees. Lame, but I could use the money now. Besides, it doesn't make sense to invest when I still have a mortgage and student loans to pay off.

I am thinking of rolling it into a Roth IRA with some mutual funds with a company of my choice (not my employer's choice). I suppose that would involve paying taxes. I like the idea of paying the taxes now and having no penalty for withdrawing if needed. It's my money, and I don't like people telling me what I can't do with it.

[12,000 RPM]

dont cash out roll it over bro

[Eye of the Tiger]

Roll it into what? A fatty?

[giant_mtb]

Roll it into what? A fatty?

Yes.

[Laconian]

Move it into a traditional IRA with Vanguard or Fidelity. Much better than a 401k.

[Laconian]

You can convert the IRA to a Roth at a later date, no need to pay the tax hit now.

[Eye of the Tiger]

Ok, so if I skip the IRA for now and just invest freely... What is best for investing a fixed amount and just letting it simmer for about 10 years? CD, low risk mutual fund, currencies? I am dum.

Or

I'm just thinking... Maybe I can cash out 401K, and use it to pay for this online certificate program for medical coding. Maybe there is some shortcut where I dont have to pay as much taxes on it if it goes straight to education. I absolutely refuse to take out more student loans.

[MX793]

Roll it into something you can contribute to.  Consider maybe one of those target date funds.

[Eye of the Tiger]

Roll it into something you can contribute to.  Consider maybe one of those target date funds.

I have had no luck with dates for the last several years. Not sure I want to fund such a failing enterprise.

[Laconian]

Ok, so if I skip the IRA for now and just invest freely... What is best for investing a fixed amount and just letting it simmer for about 10 years? CD, low risk mutual fund, currencies? I am dum.

Or

I'm just thinking... Maybe I can cash out 401K, and use it to pay for this online certificate program for medical coding. Maybe there is some shortcut where I dont have to pay as much taxes on it if it goes straight to education. I absolutely refuse to take out more student loans.

You can do both. You should invest in a combination of retirement and non-retirement accounts, because you'll need something for the years before you hit your withdrawal date.

[Lebowski]

I would not cash it out, and otherwise not do anything that incurs a penalty.

If you have the option to roll into an IRA, I'd probably do that. If you are in a low tax bracket now, and don't mind paying the taxes, it's not a bad idea to convert to a Roth.  But a traditional ira is fine, too.

[Eye of the Tiger]

Well, I'm not in a high tax bracket, so Roth seemed like a good idea.
But cashing out could really jump start my career change. It may be more than worth paying the penalties.

[Byteme]

You can convert the IRA to a Roth at a later date, no need to pay the tax hit now.

I'd convert it now.  One would expect it will grow over time so converting now means paying taxes on a lower amount. 

[Laconian]

I'd convert it now.  One would expect it will grow over time so converting now means paying taxes on a lower amount. 

Not a bad point.

[Byteme]

Not a bad point.

That's the beauty of a Roth.  You pay taxes up front on your contribution and any future appreciation is tax free.  I wish they had Roths when I started my IRA in 1983. 

[Eye of the Tiger]

That's the beauty of a Roth.  You pay taxes up front on your contribution and any future appreciation is tax free.  I wish they had Roths when I started my IRA in 1983.

Yeah, I figure taxes will only go up in the future, so might as well pay them now.