Hi-I'm kind of new to this and need some help. Here's my situation:--I am 26 and am not currently working this year (I'm in school).--I have a 401(k), a 403(b), and a pension plan from my previous employer (the state); each one has not much money.--My husband is 28 and is currently working for the state, and has all three listed above; each one with not much money as well. --My husband is not currently contributing to either the 401(k) or the 403(b).--His employer does not match contributions since they have their own retirement plan.--We are in the 15% tax bracket.--I would like to set up Roth IRA's for both of us.First of all, I know I can roll over both my 401(k) and 403(b) into a traditional IRA and then into a Roth IRA. How do I go about getting started on this? My 403(b) is currently with TIAA-CREF, does anyone know if they have Roth's? Also, I don't think we can do anything with my husband's 401k/3b's since he is still working with the state, right? Presumably he would just have to start a Roth IRA from scratch. Unfortunately, this means he would have 4 separate retirement plans, each with a little bit of money (at least for now).Also, someone please correct me if I'm wrong on these facts: I can contribute to a Roth IRA this year (even though I'm not working) since my husband is working. We can contribute up to $2000 apiece to each Roth IRA and the amount that I convert from my soon-to-be traditional IRA will not count towards that amount right?Whew, so much to think about, it is easy to get overwhelmed! Any advice is much appreciated.thanks,mrw
Hi mrw, you seem to be on the right track.On transferring your old 401K and 403B to an IRA and then doing a Roth conversion, first step is to select a custodian for that IRA plan. You will also want to contact your employers plan custodians. If one of those is TIAA-CREF their 800 no will be able to advise if they have IRA accounts available.In most cases to initiate a transfer, contact the custodian you want. They have forms for you to fill out and will take care of the details. Sometimes, your employer will also have forms for you to fill out.Multiple small acounts is a problem for many. Consolidating them when you get the chance is usually a good idea--just to minimize paperwork and keep them manageable--especially if some of them charge annual maintenaince fees. Roth is a good idea for both of you to the full $2K limit. Otherwise, try focusing your contributions in a minimum number of accounts--ideally the best one in terms of performance and future taxes. That is likely to be your Roth if you have no matching. Otherwise, the higher contribution limits of the 401K plans usually make them attractive.
You can take your husband's 403(b) and transfer it to another company, which might get you better investment options, but won't reduce the number of accounts he has.In the 15% tax bracket, there's not as much benefit to a 401(k) or 403(b). Roth IRAs and taxable (i.e. nonretirement) accounts have a good shot at being better.
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