You’ve been granted free access to this subscribers only article.
Roll the 401K into an IRA
Financial Straight-TalkJune 11, 2014 | 2,004 views | Post a comment
How should I handle my 401(k) when moving from one job to another?
I would roll it to an IRA. Your new company, if you move it there, will have limited choices for your 401(k). You’d also probably have a lengthy waiting period for verification and the potential add-on fees and taxes.
Plus, with an IRA you can cash it out if something really bad happens. But I rarely ever advise people to cash out their IRAs. The only exceptions are extreme cases, like to avoid bankruptcy or foreclosure. Even then, hardship withdrawals are very difficult to get. And again, this kind of thing should never be done except in an absolute, worst-case scenario.
Just roll your money into a traditional IRA, Tracy. It’s called a direct transfer IRA, and that way there will be no taxes on it. You want the money to go directly from the 401(k) to the IRA. Then, you’ll have the freedom to choose from about 8,000 mutual funds and move the money around, if you like.
In other words, you’re in control. That’s the way it should be when it comes to your money!
We have three children, ages 15, 10, and nine. With our oldest starting high school and just being a teenager, we’re spending lots more money on her than the others. It’s almost like she’s the favorite child. Should we spend more on the other kids to make things seem a little more fair?
I don’t think so. In five or six years, it’ll be their turn and you guys will be spending that kind of money on them, too. That’s the way it is with teens.
Here’s a question for you. When the 15-year-old is 23, and you’re buying prom dresses and all the other teenage stuff for the younger kids, are you going to turn around and give the older child extra money just to “even things up”? Of course not -- that would be silly. She had her moment in the sun, and now it’s their turn.
Just make sure you hug on all of them equally, and let them know you love them!
Would it be okay to go on a tenth anniversary honeymoon while we’re working on our debt snowball?
I don’t think so. I mean, it’s not against the law or anything like that. I just don’t think it’s a good idea. I wouldn’t do it, and I wouldn’t suggest taking the trip then rolling it into your debt snowball either. I know this probably sounds mean, but I’m just not a big romantic when it comes to people who are deeply in debt.
A rare exception may be a situation where you have a really small debt snowball and a nice, fat income. But most people in your shoes have average incomes and mountains of debt. On top of that, they want to take a big celebration vacation? I would say no.
At some point you have to stop the spending and concentrate on getting your finances in order. Besides, you’ve got a lifetime together to take romantic vacations and celebrate your marriage. Just wait until you can afford something like that. Trust me, you’ll enjoy it even more!
Dave Ramsey is a best-selling author of The Total Money Makeover and the nationally syndicated host of “The Dave Ramsey Show,” which airs locally on radio station 550 KTSA. View column archives at www.daveramsey.org. Questioners’ identities have not been verified by the Dave $ays column or this newspaper.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Section A: General News Archives
Agencies uncover $400K in stolen vehicles, parts (February 3, 2016)
China Grove begins vote on tax rollback (February 3, 2016)
Clock running out for Floresville recall issue (February 3, 2016)
Connally expands high-tech health care (February 3, 2016)
Council action changes boards (February 3, 2016)
Court Update (February 3, 2016)
Deputies charge Floresville spurned lover with arson (February 3, 2016)
Deputies investigate recent thefts (February 3, 2016)
Editorial: The demand for villains (February 3, 2016)
Editorial: What’s in a city charter? Is it like a … Constitution? (February 3, 2016)
Eight-liner opponents face deadline (February 3, 2016)
FELPS pools tornado damage claim with city, Floresville ISD (February 3, 2016)
Floresville USDA accountant resigns (February 3, 2016)
Free CERT disaster course (February 3, 2016)
Get a free heart health screening in Kenedy Feb. 12 (February 3, 2016)
Greater LV Chamber to meet (February 3, 2016)
H-E-B recalls cookware (February 3, 2016)
Hold on for now (February 3, 2016)
It’s all happening at Nixon-Smiley Elementary (February 3, 2016)
Kicaster area will have fire coverage (February 3, 2016)
Landfill welcomes China Grove junk (February 3, 2016)
Letter: Apple Pie author extends thanks (February 3, 2016)
Letter: Gonzales differs with writer’s conclusion (February 3, 2016)
Letter: Talamantez truly a man of the people (February 3, 2016)
Life Line Screening event set in Floresville Feb. 28 (February 3, 2016)
Mock Republican Debate Feb. 20 (February 3, 2016)
Nixon-Smiley livestock show set for March (February 3, 2016)
One dead in game-room robbery (February 3, 2016)
Pioneer Award honors Burnside (February 3, 2016)
Pirates Cove in Poth offers after-school care service (February 3, 2016)
Police Blotter (February 3, 2016)
Save the date for Lincoln Dinner (February 3, 2016)
School district cops ink deal with city, county (February 3, 2016)
Second responders to meet (February 3, 2016)
Stockdale, La Vernia units respond to back-to-back fires (February 3, 2016)
Tanneberger is top agent (February 3, 2016)
Weigh in on Loop 410 changes (February 3, 2016)
Wilson County Hermann Sons lodges meet new-member goal (February 3, 2016)
‘Loving’ heart-shaped treats are for the birds (February 3, 2016)