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Author: Rickademus Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120812  
Subject: 401K to Roth IRA? Date: 1/2/1999 7:07 PM
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I've got a question I haven't seen answered on this board before, so I'm looking for some help. I've just changed jobs and I'm trying to figure out what to do with the money I accumulated in my previous company's 401K program--about $20,000. My new employer offers a 401K program, but unlike my old company, which matched every dollar I contributed with 25 cents, there is no matching. In addition, my new employer's 401K program is set up so that I'm forced to buy what this particular brokerage firm calls Class B fund shares. These shares are subject to a sales charge of 5% if I redeem the shares within six years of purchase. Actually the sales charge is scaled down each year so that shares redeemed before one year get hit with a 5% charge, before two years 4%, and so on. In short, my new employer's 401K program doesn't seem that attractive to me. Plus, it's important for me to point out that I'm not planning on staying with this new employer for more than two years. In light of all this, my question is, would I be better off taking the $20,000 I have in my old 401K and rolling it into a Roth IRA, which means I'd have to ante up $4,000 in taxes next year. Or, should I go ahead and roll this 20 grand into my new employer's 401K and get hit for hefty sales charges when I move my money again? I'd really appreciate some guidance on this matter. Thanks.
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