Another investment Q

**bagtagley** · 05-16-2006, 12:11 PM

I've got retirement money spread out a bit, and I want to consolidate.

I've got some money in a Classic IRA from a job I had a few years ago, which I'm not paying into. I've also got some money in a 401k and a 457k from my most recent "old" job that I need to move pretty soon before the penalties kick in (we'll call that county money). I am now paying into a Roth IRA and a 401K at my current job.

Should I do anything w/ the Classic IRA? Where should I move the "county money"? To the new 401k or to the Classic IRA?

Finally, I'm in the early stages of saving for a house. Currently we're just putting the money into a savings account. I know this isn't ideal, but the money needs to be pretty liquid, so what are some options? Should I put it into the Roth IRA and start considering that the "house fund"?

Thanks

**Grange** · 05-16-2006, 01:14 PM

That's exactly what I did with my Roth IRA. I used it as part of my down payment. From what I learned when I went that route was that you can use up to 10K in your lifetime penalty free from a Roth IRA.

**Aldo** · 05-16-2006, 03:35 PM

Originally Posted by bagtagley

but the money needs to be pretty liquid, so what are some options? Should I put it into the Roth IRA and start considering that the "house fund"?

Thanks

I'm starting a hedge fund called based on used audi futures, want in?

**bagtagley** · 05-16-2006, 04:08 PM

I see how it is, DTM gets all the investment love.

I hate you guys...except Aldo and Grange of course.

Aldo, I'm interested!

**Tippster** · 05-16-2006, 04:24 PM

Well, his advice is certainly meant for him alone, and if you tried to take heed of said advice all your nest eggs would become scrambled. That's right - fuckin' scrambled, Brah.

**irul&ublo** · 05-16-2006, 04:27 PM

Originally Posted by bagtagley

I've got retirement money spread out a bit, and I want to consolidate.

I've got some money in a Classic IRA from a job I had a few years ago, which I'm not paying into. I've also got some money in a 401k and a 457k from my most recent "old" job that I need to move pretty soon before the penalties kick in (we'll call that county money). I am now paying into a Roth IRA and a 401K at my current job.

Should I do anything w/ the Classic IRA? Where should I move the "county money"? To the new 401k or to the Classic IRA?

Finally, I'm in the early stages of saving for a house. Currently we're just putting the money into a savings account. I know this isn't ideal, but the money needs to be pretty liquid, so what are some options? Should I put it into the Roth IRA and start considering that the "house fund"?

Thanks

Are you talking about a "classic IRA" as money from a qualified plan that you rolled over when you left your old job?

If that is the case, I don't think you can roll it into a Roth, but you probably can roll it to the 401(K). If it was an IRA you did for yourself, I do'tn think you can roll it to either.

As for the county money, call Schwab or Fidelity or whomever, and they get it transferred for you. Then you can decide exactly what you want to do. Or you can roll it to your current 401(k).

**nopainnojane** · 05-16-2006, 07:22 PM

For the money in old company plans, I would put them into the "Classic IRA" through a direct rollover. This will avoid any taxes and penalties by doing this. You can take the money in a classic IRA to a roth, but you would have to pay taxes on that, and depending on the amount, my be a large amount.

I would avoid putting old company plans into current company plans for this reason, the choices that you have to invest are very limited in 401k plans vs. an IRA at any major discount brokerage firm. If you keep the classic IRA, as you change jobs, you can keep dumping in old 401K plans into it. I hope this helps for general help.

Disclaimer, as always, you should consult a tax advisor for what is best for your specific tax situation.

**InspectorGadget** · 05-16-2006, 08:11 PM

Originally Posted by bagtagley

I'm in the early stages of saving for a house.

I can't help you with the investment question, though I do know somebody that can. I would, however, like to help you with the purchase of your home when the time comes. I know a couple maggot/real estate agents that would like to help you too.

You know where to find me.

**Patches** · 05-16-2006, 08:55 PM

You can roll the IRA into a Roth. You pay income tax on the amount you roll over. I've done the math and if you are under 35 or so its good to roll it over even if you are in a higher tax bracket now than when you retire, assuming you can (and do) pay the taxes out of your bank account, not out of the IRA itself. Of course... my math could be wrong, as could the "facts" above. But I don't think they are. Ask Vanguard, they'll know. (They're also the only investment company not out to screw you).

You should be able to get a better return on your house money with a money market fund fund at Vanguard, so I'd check that out.

Of course there's lots of MM funds... you have to figure out which one yourself by figuring out the after-tax returns based on your tax brackets and which state you live in.

The last option is to buy CDs, you can also do this at Vanguard. They yield about 1% more than a money market fund these days.

Best place to research this stuff is diehards.org and vanguard.com .

Good luck!

Patches