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I just got a new job, and the company does not match 401k. Should I still put money into the 401k, or just put my money straight into a Roth IRA?

Also, what do I do with the 401k from my previous employer?
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I just got a new job, and the company does not match 401k. Should I still put money into the 401k, or just put my money straight into a Roth IRA?


depends.
some don't like 401k w/o match because they tend to
offer crappy investments

I LIKED 401k because it forced me to save




Also, what do I do with the 401k from my previous employer?


roll it DIRECTLY to individual IRA

good luck
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roll it DIRECTLY to individual IRA

Depends on the poster's age and retirement plans. If the 401K allows penalty free withdrawals at 55, it's something to consider BEFORE rolling it to an IRA. (and yes, there are 72t distributions from IRAs but that's a much longer post)

On the other part of the OP's post, I'd fund a Roth IRA now BUT it should really be part of an overall financial plan that includes many other pieces so doesn't work that well in a vacuum.
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I just got a new job, and the company does not match 401k. Should I still put money into the 401k, or just put my money straight into a Roth IRA?

Also, what do I do with the 401k from my previous employer?


How does the quality and cost of investments compare between your current and previous employers 401K plans?

As previous noted, 401K plans have different distributions options than IRAs. If you are planning on accessing the funds between the ages of 55 and 59 1/2, it is advantageous to leave the funds in a 401K.

You have 4 choices:
1.) Leave it with your previous employer
This is often not the best choice. If the balance is large enough to be allowed to leave it, it is a good 401K plan and you will continue to track it, it can be a good option.
2.) Roll it into your current employer's plan
If your current employer has a good plan and allow roll-ins, this is a good option.
3.) Roll it into an IRA
IRAs provide more options than 401K. It requires more decisions, and often is the best choice.
4.) Distribute the 401K
This is the worst choice. The distribution is taxable, and probably subject to state and federal penalties.

or just put my money straight into a Roth IRA?

This decision needs to be made based on your overall financial plan. IRA and 401K contribution limits are separate. You can contribute to both.
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I just got a new job, and the company does not match 401k. Should I still put money into the 401k, or just put my money straight into a Roth IRA?

Yes. I mean do both if you can. Even without an employer match a 401k has value due to the "painless" contributions and tax deferral.
If you must make a choice between the 401k and an IRA I would probably choose the IRA (either Roth or traditional).

Also, what do I do with the 401k from my previous employer?

Roll it over to an IRA.

Bob
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There's a lot of information missing here, to be able to give clear answers. The correct answer, as always, is: IT DEPENDS. (Years ago, I was advised you can always bill more for an answer that starts that way.)

I just got a new job, and the company does not match 401k. Should I still put money into the 401k, or just put my money straight into a Roth IRA?

IT DEPENDS. On a lot of things - like your current income and tax bracket, and what you think your income (and deductions) will be after you retire. An employer match is great, but even without it, you get to lower your current taxable income by deferring income via a 401(k) plan. Why wouldn't you want to? Do you really think you'll be in a higher bracket in retirement?

Also, what do I do with the 401k from my previous employer?

IT DEPENDS. How old are you? When do you think you'll retire? Or want the use of the money? If you're 59-1/2 it doesn't matter as much. You can withdraw from an IRA with no penalty. Otherwise it may be to your advantage to have your money in a 401(k) plan. You can withdraw from an employer's plan after separation from service at age 55, at least with no 10% early distributin penalty. Of course, the plan has to permit it.

And since my advice DEPENDS on a lot of unknown variables, I am charging double my usual rate for Motley Fools.

Bill
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