401k rollover- where to put it?

[jlt19]

I only worked at my prior employer for about a year, so the amount is less than $20k. I already have the check made out to Vanguard, though I suppose I could ask them to stop payment and rewrite one.

My initial thought was to just put it in my Roth. I know I’ll have to pay taxes on my pre-tax contributions and I am able to do that.

That’s probably better than opening a traditional IRA or adding it to my new 401k, right?

With my new, we’ll be going up a tax bracket either next year or soon after. I’m 40, so still a considerable time to retirement. Think that may be al the pertinent information.

So, which do you think makes the most financial sense?

[ohgillian]

I prefer rolling over to Vanguard b/c the IRAs have more investment options and more flexibility than money does that you roll into another 401k. So that's always been my preference.

As for Roth vs Traditional, I don't know that one is "better" than the other without knowing a lot more about your overall retirement picture, what you expect of your income in retirement, etc. Honestly, IMO, either is fine -- just the fact that you aren't withdrawing it is huge.

[Susie]

I rolled my SIMPLE IRA into a traditional IRA at Vanguard when our firm discontinued that plan and switched to a 401k.

[puppylove64]

I rolled mine over to vanguard because the fees and options are better. I have both a Roth and traditional Ira at vanguard so I can keep pretax stuff separate. I never wanted to do a conversion.

[hocus2]

I done all 3 options -- rolled over into IRA, rolled into new plan and left money where it was (this was allowed under my plan, sometimes it is not).

I prefer rolling it into my new 401K since it makes it easier to keep track of it. Then I guess and IRA as a second option but there was some paper work that was annoying to deal with that.

[Poppy]

I rolled one over to a traditional IRA at vanguard and I'm happy with that decision, except that it's keeping me from doing a backdoor Roth. For that reason, I wish I would have left it or rolled it into another 401k.

But the investment options are good and it wouldn't have made sense with our tax picture to convert it to a Roth (could still do that if we decide to now).

I don't know enough about your situation to say whether converting is a good idea for you.

[jlt19]

Thanks everyone for the replies.

I wasn’t even thinking about fees and such, so you’re all right that putting in Vanguard is the best option. I think since I have a Roth there, I’ll just add it to that versus having to open a new, Traditional IRA.

Thanks!