Rolling Over 401k

#1

Hi

I am about 75% of the way through Jeremy’s course which is very informative. I have a few questions.

I have a 401k sitting in limbo, it has 33k in it. I know that if I roll over my 401k to a Roth it gets taxed. Should I roll over my 401k to a Traditional IRA?

Also I was planning on putting 23k in an index fund. and some money in Tesla, Apple and Amazon. Does this sound like a good idea. ?

Last question. I see Jeremy uses Vanguard, Charles Schwab and Fidelity in his course, which brokerage would you recommend I roll my 401k over to for a self directed IRA?

Thank you

#2

If you don’t want to be taxed on that rollover amount, then do traditional IRA. If you’re ok with being taxed and convert the sum to a Roth, then do Roth IRA.

Fidelity, Vanguard, or Schwab would be a good choice. Can’t go wrong - all 3 are recommended.

People in this forum will advise you to invest in Target Date Index Funds or 3-fund portfolio (see Jeremy’s prior blog post on 3-fund portfolio). Either of those options will already have included Tesla, Apple and Amazon in their line-up. If you choose to allocate more money towards those 3 individual stocks, that is a personal preference for whether that is a good choice. I personally invest mostly in index funds, but have a “fun” brokerage account to invest in individual stock options and I do own Apple and Amazon in that “fun” account.

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#3

Thank you for the response

#4

I agree with everything @Mindi mentioned and wanted to add that if you withdraw the money and you are under 59.5 years of age you’ll also get penalized 10% on top of the taxes you’ll incur .

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