A.I.M. "In Depth" Q&A

[Toofuzzy]

Hi Jers33

>>>>
I'd like to start AIMing but have a dilemma. I have about $30K in a work 401K and am wondering if it makes sense to bite the tax bullet and do a Roth conversion where I can AIM a couple of exchange traded funds. Or, perhaps I can just AIM inside my current 401K and then start a Roth on the side with spare cash? There aren't any transaction fees that I'm aware of in the 401K but the fund options are limited. I'm expecting to be in a higher tax bracket down the road, for what it's worth. Also, Vanguard, Schwab, or Fidelity for a Roth? Or maybe they're all the same. Thanks.<<<


1) I assume you are no longer at that job because you can't really take funds out of a 401K at a job you are still at.

2) If you are no longer at the job you can roll over to a TRADITIONAL IRA either to VANGUARD for funds or a discount broker for ETFs

3) You can roll the TRADITIONAL into a ROTH and pay the taxes and no one says you have to do it all at once so you can roll over what will be invested in stocks and leave the more stable stuff for later. That way you might keep yourself from being bumped into a higher bracket.

4) If you are still at the job you want to keep contributing to the 401K as long as they are still matching your contribution. If they match 5% contribute 5% if they match 7% then contribute that. It s free money. You can still do the Roth also as long as you are below the income ceilings. Does your job have a ROTH 401K ?

Tofuzzy