No. of Recommendations: 0
Greetings, Derobj, and welcome. You wrote:

<<I'm 23, I've got $5000 from a 401k at my old company, I'm trying to decide if I should roll it into a self directed IRA. My question is should I put it into a traditional or a Roth? I've read the info on both and I guess I need it explained to me in more laymen terms, or rather with some examples. Please help me out if you can. >>

To get the money to a Roth, you would first have to transfer it to a traditional IRA. Once there, then you may further transfer the sum to a Roth. Whether you should or not depends on your tax rate today versus that in retirement, how long the money can stay in the Roth, how you will pay the income taxes due on the conversion, and the size of coupled with your desires for your estate. To see some examples and issues involved in making this decision, see my analysis in post 1567 at Then run a similar analysis for yourself.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.