Assuming you can make direct Roth IRA contributions (you make less than like $160k), then you can roll over the 401k money to a traditional ira. If you make more than that, you can probably leave the 401k where it is assuming there aren’t some extra fees you need to cover since you’re no longer an employee.
I don’t know enough about calsavers. If you can make tax deferred contributions then it probably would be better than a brokerage account. I dunno what the fees might be.
Also, social security isn’t going to run out. Of course, it may pay out a lower benefit amount in the future.
I make 72k :( .. the vanguard has $20 fee a year and seems to be doing well. I think the calsavers charges a high fee from what I've read so I didn't bother.
>I think the calpers charges a high fee
Is it CalPERS or CalSavers? **HUGE** difference.
Assuming the latter, you should do either CalSavers ***or*** your own Roth IRA, but not both. CalSavers *is* a Roth IRA and having two active rIRAs is a recipe for an over contribution.
As for the old 401k, you can roll that over into an IRA or leave it where it is.
You can roll the 401k money in to a traditional ira. You’ll save $20 and you can invest in vtsax or something.
And if the fees for calsavers or the invest options are poor, then $7000 in to the Roth IRA is perfectly fine.
You’re right in the area where traditional savings would make more sense as you get in to the 22% tax bracket.
There are no income limits for rolling over a 401k to an IRA. You can roll over a traditional 401k to a traditional IRA and a Roth 401k to a Roth IRA regardless of your income.
Yeah, that’s not what I’m talking about. Simply if they’d have to do backdoor Roth IRA contributions then moving the 401k to a traditional ira would prevent that.
Is your 401k traditional or Roth? If it is traditional, converting it to Roth would incur a large tax bill, almost 11,000 between federal and state it looks like. This might not be a bad idea as long as you have the money to spare sitting around to pay that bill. If you don't have that money to spare, you can either leave it with Vanguard or open a traditional IRA with Schwab and roll it into that (traditional to traditional would not incur a tax bill).
If the 401k is Roth, then you can just roll it into your Roth IRA at Schwab, which will not be a taxable event. Or you leave it where it is.
Calsavers expenses are not completely horrible, but are still quite a bit higher than you can get through Schwab, and I don't see any point in using it.
Assuming you can make direct Roth IRA contributions (you make less than like $160k), then you can roll over the 401k money to a traditional ira. If you make more than that, you can probably leave the 401k where it is assuming there aren’t some extra fees you need to cover since you’re no longer an employee. I don’t know enough about calsavers. If you can make tax deferred contributions then it probably would be better than a brokerage account. I dunno what the fees might be. Also, social security isn’t going to run out. Of course, it may pay out a lower benefit amount in the future.
I make 72k :( .. the vanguard has $20 fee a year and seems to be doing well. I think the calsavers charges a high fee from what I've read so I didn't bother.
>I think the calpers charges a high fee Is it CalPERS or CalSavers? **HUGE** difference. Assuming the latter, you should do either CalSavers ***or*** your own Roth IRA, but not both. CalSavers *is* a Roth IRA and having two active rIRAs is a recipe for an over contribution. As for the old 401k, you can roll that over into an IRA or leave it where it is.
You can roll the 401k money in to a traditional ira. You’ll save $20 and you can invest in vtsax or something. And if the fees for calsavers or the invest options are poor, then $7000 in to the Roth IRA is perfectly fine. You’re right in the area where traditional savings would make more sense as you get in to the 22% tax bracket.
Wait, you have CalPERS, so you have a pension?
No it's state requirement because my job doesn't offer 401k
You are talking about CalSavers here, not CalPERS, correct?
Yes
Just contribute to your Charles Schwab IRA and open a brokerage account to invest in once you’ve hit the IRA contribution limit.
There are no income limits for rolling over a 401k to an IRA. You can roll over a traditional 401k to a traditional IRA and a Roth 401k to a Roth IRA regardless of your income.
Yeah, that’s not what I’m talking about. Simply if they’d have to do backdoor Roth IRA contributions then moving the 401k to a traditional ira would prevent that.
Calsavers is an auto-IRA - it's just a Roth IRA. You're better off opening your own.
Is your 401k traditional or Roth? If it is traditional, converting it to Roth would incur a large tax bill, almost 11,000 between federal and state it looks like. This might not be a bad idea as long as you have the money to spare sitting around to pay that bill. If you don't have that money to spare, you can either leave it with Vanguard or open a traditional IRA with Schwab and roll it into that (traditional to traditional would not incur a tax bill). If the 401k is Roth, then you can just roll it into your Roth IRA at Schwab, which will not be a taxable event. Or you leave it where it is. Calsavers expenses are not completely horrible, but are still quite a bit higher than you can get through Schwab, and I don't see any point in using it.
I think I'm going to leave my 401k where it's at in Vanguard and just start a Roth on my own. That way I have two options?