Typically, most people automatically assume they should rollover their old 401(k) into a traditional IRA. However, a lot of people have been asking about another option lately – and that’s whether you can roll your 401(k) over into a Roth IRA instead.
Fortunately, the definitive answer is “yes.” You can roll your existing 401(k) into a Roth IRA instead of a traditional IRA. Choosing to do so just adds a few additional steps to the process.
Whenever you leave your job, you have a decision to make with your 401k plan. Most people don’t want to let an old 401(k) sit idle with an old employer, and could benefit immensely by moving those funds somewhere that could benefit them more in the long run. Let’s see if I can help you make “cents” of the situation.
But first, let’s look at the rules behind the strategy of rolling over your 401k into a Roth IRA.
My favorite online broker is Scottrade but you can check out our recap on the best places to open a Roth IRA and the best online stock broker sign up bonuses. There are many good options out there, but I have had the best overall experience with Scottrade. No matter which option you choose the most imporatant thing with any investing is to get started