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Subject:  Re: 401K to Roth IRA? Date:  1/3/1999  8:58 PM
Author:  TMFTaxes Number:  7920 of 127613

[[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. ]]

The words "good", "better" and "best" are very subjective. Without know much more about you and your personal tax and estate situation, I can't really say what would be better for you.

But as bliles and JAB point out, you can have the best of both worlds. You can take your 401k funds and roll them over to a regular IRA account. There would be no taxes associated with that rollover, and you could then invest in any vehicle that you see fit.

To take the regular IRA into a Roth IRA would require an additional decision, since there would be tax issues to deal with. Would it be a good idea? It certainly could be for you. But I don't know that.

You might want to read more about the Roth IRA issues and the thought process that goes into making a determiniation in converting your regular IRA to a Roth IRA in my series of posts on the Roth IRA in the Taxes FAQ area. Check it out.

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