Fix My Portfolio: I have $6,000 in an old 401(k): Should I do a rollover or convert it to a Roth IRA?

by | Feb 1, 2023 | Stock Market

Dear Fix My Portfolio,  I left my job and my 401(k) is still there. I’m 52 and have maybe a little over $6,000 in the account. I can’t move my money to my new job until later in 2023, and I don’t want to pay the penalties to take the money out. So should I wait and just transfer the money to my new job or move it to a Roth now, and how would that work with taxes?Dawn  Got a question about the mechanics of investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write me at 

Dear Dawn,  I’m glad you’re considering all the good options for your old 401(k) and trying to avoid the worst choice, which would be cashing out the money and spending it. Sometimes people see a relatively small balance like that and think: What’s the difference? They could use the money now, and they just take the check and the savings evaporate, then they’re hit with the taxes and a 10% penalty if they are younger than 59 ½.  You say you want to avoid that, so your options are to open a rollover IRA at pretty much any financial institution and put in the whole amount, wait for your new job to …

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