New job, rollover vs cashing out?

[ttown]

Well I don't see anything on your list that is a real need, gun,phone, and carpet. I'd do a straight IRA rollover. The ROTH isn't going to work for you unless you can come up with 4 or 5 grand to pay the taxes (depending on tax bracket) to get it into the ROTH.

I'm not a fan of tax differed anymore. The government raises taxes at will it's better to pay them as you go. It might be so bad by the time you retire and we've got socialized medicine the average tax payer may be taking over 50 percent from your paycheck.

Put in what the company will match and then start that ROTH. Would be my direction. JMO

PS: If you put money in a ROTH before mid April put it in as 2010 contributions. Your limited to 6k per year in a Roth, married is about twice that but I'd have to do a search to find the number. That way you haven't even started your 2011 contributions.

 

[DPI]

Lets take this one more step further. If you invest in a diversified mix of mutual funds, you will likely receive an average of 9% per year, based on historical trending.

That said, if you retire at 65, based on simple compounding interest, that $14,442 will be worth $294,827.

Year -Value
1- $15,742
2- $17,159
3- $18,703
4- $20,387
5- $22,221
6- $24,221
7- $26,401
8- $28,777
9- $31,367
10- $34,190
11- $37,268
12- $40,622
13- $44,278
14- $48,263
15- $52,606
16- $57,341
17- $62,501
18- $68,127
19- $74,258
20- $80,941
21- $88,226
22- $96,166
23- $104,821
24- $114,255
25- $124,538
26- $135,746
27- $147,964
28- $161,280
29- $175,796
30- $191,617
31- $208,863
32- $227,660
33- $248,150
34- $270,483
35- $294,827

 

[Perplexed]

That said, if you retire at 65, based on simple compounding interest, that $14,442 will be worth $294,827.

Is that $294,827 in today's dollars? I'm all in favor of investing for retirement, but we have to keep it in perspective

 

[DPI]

Is that $294,827 in today's dollars? I'm all in favor of investing for retirement, but we have to keep it in perspective

Yes it is. However, if we go through a period of hyperinflation, which I expect we will, the average return on his investments should go up too.

 

[DPI]

This scenario is paying back your loan and rolling all of it over into another 401k.

Starting with $14,442+$3,822=$18,264

Year Value
1 $19,564
2 $21,325
3 $23,244
4 $25,336
5 $27,617
6 $30,102
7 $32,811
8 $35,764
9 $38,983
10 $42,491
11 $46,316
12 $50,484
13 $55,028
14 $59,980
15 $65,378
16 $71,262
17 $77,676
18 $84,667
19 $92,287
20 $100,593
21 $109,646
22 $119,514
23 $130,270
24 $141,995
25 $154,774
26 $168,704
27 $183,887
28 $200,437
29 $218,476
30 $238,139
31 $259,572
32 $282,933
33 $308,397
34 $336,153
35 $366,407

 

[cyberslider]

I cashed out a 401K when I changed jobs about 12 or 13 years ago. I only had about 2K in it and got about 1K after penalty and taxes.

Now if I change jobs, I will roll it over. If I would have had 14K back then, I would have rolled it over.

 

[cjjtulsa]

Yes it is. However, if we go through a period of hyperinflation, which I expect we will, the average return on his investments should go up too.

As was mentioned before: what will taxes be like in 30 years? I'm also no longer sold on "tax defferred" investments.

 

[bettingpython]

Roll it over.

I have about 24K in retirement right now (My position has me in the teachers retirement fund) you bet if I ever leave this job it's going into a roth.

 

[ronny]

The tax deferred option did not work very well for me.

 

[Shoot Summ]

Cash it out, the Government has you covered for retirement....