I have about 18K with a previous employer. I do not want to roll it over to my current employer. Rather, I have opened a retirement account at Schwab and getting ready to do a rollover. I intend to convert this 401K and other retirement accounts to a Roth next year. My questions is:
Will I benefit by rolling over to Schwab now or wait until I am ready to convert? That is, assuming the investmeents would provide the same amount of returns from either my employer's 401 K manager or Schwab.
Roll it over to Schwab now. It may take a few weeks and this way you know its already at Schwab so when it's time to convert, it's instant.
I also imagine that Schwab has MUCH lower expenses than any 401k does. 0.09% on their TSM/SP500 funds and no custodial fees. The average 401k is something around 1.5% fees for the same thing.
The BIG question is how long to get the conversion from the current custodian into the rollover account?. I've seen them take a few weeks. I had one take several months. Talk to Schwab about their fee structure. I used to be invested with a rollover at Schwab until they changed the deal in a one sided way. You do NOT want to have this be an extended process in 2010 when the tax laws WILL be changed by those in power.
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