whats the best way for a 21yr old to invest 4g's for retirement?

[DarkManX]

I left my previous employer and accumilated 4000$ in my 401K but now I need to invest it in something, whats the best thing to do with it? I dont want to cash it out because ill lost half of it, so I wont be able to touch the money for 40+ years. Where should I put it? my new job also has a 401K plan so I have the option of roling it over, but is there better options out there?

 

[Tobolo]

Lotto Tickets. Or invest some money into my FS thread to help spank CC debt!!!

 

[radioouman]

Why can't you reinvest it in your current 401k? I don't think I understand.

But otherwise, put it into a Roth IRA. Or you could simply buy mutual funds.

EDIT. I misread the original post.
If your new employer's 401k has good mutual fund options, that's a pretty good way to go. But a Roth IRA is a good choice too. It's up to you.

 

[JLGatsby]

One share of this.

http://finance.yahoo.com/q?s=brkb

Don't touch it until you're 60.

 

[DaveSimmons]

But seriously, an IRA rollover to either a brokerage, Fidelity.com or Vanguard.com. Get a stock index mutual fund, such as an S&P500 fund like Vanguard's VFINX.

If you already have a traditional IRA somewhere you can probably merge the rollover into that to increase the balance and possibly get rid of a maintenance fee.

A conversion from traditional IRA to Roth IRA might be worth it if you can afford paying the taxes (401k is pre-tax money, Roth is after-tax money).

 

[vi edit]

On $4000, assuming you make under the allowance (I think it's around 90k), I'd just roll it to a traditional IRA and recharacterize to a Roth.

It will be considered income and you will be taxed on it, but it won't be much at all. If your effective tax rate is only 10%, you'll only be required to pay $400 in taxes on it.

 

[mugs]

You can start by not calling it 4g's You're not a rapper. DaveSimmons gives good advice.

 

[SuperNaruto]

I rolled min into vanguard, you can do it online and go to your old 401k place and have them write a check out to vanguard... they'll mail the check to you and you mail to vanguard.. good stuff..

 

[snoopdoug1]

Originally posted by: mugs
You can start by not calling it 4g's You're not a rapper. DaveSimmons gives good advice.

lol

 

[ebaycj]

Roth IRA,

Taxes now on $4000 is much better than Taxes later on $865,000 (assuming 44 years @ 13% interest, should be doable with a decent mutual fund.)

 

[PAB]

Originally posted by: ebaycj
Roth IRA,

Taxes now on $4000 is much better than Taxes later on $865,000 (assuming 44 years @ 13% interest, should be doable with a decent mutual fund.)

Mutual funds don't pay interest.

 

[DarkManX]

Originally posted by: SuperNaruto
I rolled min into vanguard, you can do it online and go to your old 401k place and have them write a check out to vanguard... they'll mail the check to you and you mail to vanguard.. good stuff..

i just checked out vanguard, they dont have any rollover IRA's, which one can I use?

 

[shadow9d9]

ROTH IRA!!!!!!!!!!!!!!!!

 

[alrocky]

Originally posted by: DarkManX

Originally posted by: SuperNaruto
I rolled min into vanguard, you can do it online and go to your old 401k place and have them write a check out to vanguard... they'll mail the check to you and you mail to vanguard.. good stuff..

i just checked out vanguard, they dont have any rollover IRA's, which one can I use?

They do have rollover IRAs. https://flagship.vanguard.com/VGApp/hnw.../Retirement/ATSRollOverPlanContent.jsp

 

[JS80]

learn golf with that money. it'll start to pay off when you're in your 30s and pay dividends for the rest of your life.

 

[imported_Mike]

Roth IRA invested in VFINX FTW