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Overheard: "How can you 'imply' cheese??"
Pro
TBWA NY layoffs today.
The new Volvo commercials are 🔥🔥🔥
Saturday night live is getting good again.
What’s it like producing at 360i NY?
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I’d wait till the end of the year.
At that point, if you’ve made significantly less money than expected because of the layoff, and are thus in a lower tax bracket, I’d go ahead and roll into the Roth.
Hopefully at that point you’ll also have less financial uncertainty, so paying the taxes will be less of a risk.
If you roll it over to a traditional IRA, then you don’t have to pay taxes. But if you roll it over to a ROTH IRA or if you take it out completely, then you have to pay taxes because it counts as income. This is because you can take money out of a ROTH account anytime. You have to check your income level to make sure sure you’re eligible for a ROTH account.
This might be better for the lung run. But there are still tax implications to this approach though. The converted funds still count as income. When I wanted to do this, the converted funds would have pushed me to a higher income tax bracket for that year. It varies for everyone I guess. Copywriter is right, if you can consult with someone, you should.
I’d roll it into a traditional so you don’t have to pay taxes. Roth has benefits for sure, but you can always open your own Roth and start there. Diversification is good!
I have a Roth already! But yes wondering if the money from the 401k would do better there than just sitting there until god knows when I get another job.
What is the benefit of rolling it into a Roth?
Since you fund it with after-tax money, you don't need to pay taxes on it again while it grows or when you withdraw.
Between the two options you outlined, I would leave it alone. Unless your ready to manage your own ROTH account and pay taxes.
Thanks everyone. If you are laid off and don’t find another job right away, would you just leave it for your next job or move it to a traditional ira? Is there some issue with just leaving it put until you have a new 401k to roll it into?
Yes, roll it into a traditional with a discount online broker. The investment choices in 401ks usually stink and have ridiculous high fees. With your own IRA you can invest in just about anything including super low fee index funds.
Leave it. Roll it over to your new 401k
Starting to wonder if I’ll ever have a new one haha
My buddy is a financial planner. I moved it to cash and am leaving it there for the time being. It’s not accruing anything, but it’s not losing anything either. I’ll figure out what to do with it once I find a new job.