new company doesn't offer Roth 401k, what to do?

[jingramm]

I have an offer in hand from another company and after looking through their benefits, they only have regular pre-tax 401k. At my current employer, I've been aggressively building a nice Roth 401k nest and now if I switch companies, I can't further contribute to it.

The company matching is the same. Any thoughts?

 

[esun]

Open a Roth IRA and if you really want to save more, also contribute to the regular 401k. Difference likely won't be huge in the long run between regular and Roth.

EDIT: Scratch that, definitely contribute up to the match as least. Roth IRA should come second, not first. Match is more important than Roth.

 

[Tarrant64]

Tell them that's a deal breaker and see what they come back with? j/k

If you're really thinking about making the switch to another company you could look into an independent 401k plan so you don't need to worry about what happens when you move between jobs. Although, you will probably lose company matching, which sounds like it might be a big deal for you.

 

[jingramm]

Open a Roth IRA and if you really want to save more, also contribute to the regular 401k. Difference likely won't be huge in the long run between regular and Roth.

EDIT: Scratch that, definitely contribute up to the match as least. Roth IRA should come second, not first. Match is more important than Roth.

but I'll be starting over from 0
from scratch
I wanted to focus on one of them, Roth 401k

 

[Tarrant64]

but I'll be starting over from 0
from scratch
I wanted to focus on one of them, Roth 401k

If you open another Roth IRA, you can roll over what you have from your current company, and just not contribute to the regular IRA through the new one. What you have at the other company doesn't just stay with them.

You could also cash out (not recommended, but just in case you didn't know...plus you'll lose a bit of what you have).

 

[rcpratt]

but I'll be starting over from 0
from scratch
I wanted to focus on one of them, Roth 401k

The Roth will still be there, you'll just be contributing to the 401k instead, right? Roll your Roth over into a new one. Am I missing something?

Always contribute up to the maximum company match first.

 

[radioouman]

but I'll be starting over from 0
from scratch
I wanted to focus on one of them, Roth 401k

There is no difference between two accounts with $25,000 each or one account with $50,000. I have six different accounts between my wife and I (401k, standard IRA, rollover IRA, wife's roth IRA, my roth IRA, standard brokerage account). I can't combine these without paying taxes, so I let each one grow.

Contribute enough to get the match in the new 401k, then focus on building your new Roth IRA.

 

[nick1985]

start your own

 

[spidey07]

You don't need your employer to open your own Roth or IRA. They only benefit they would offer would be the match. Just start your own if that's what you want, but don't give up the free money from the match on a 401k.

 

[mshan]

I believe returns over time are same for Roth and non-Roth retirement accounts.

If you are young and salary is going to go up a lot for a few years, then maybe an advantage for Roth.

I would think, but not sure, you could roll over current Roth 401 to own Roth and have much better selection of funds?

 

[Apple Of Sodom]

Fidelity has been great with working with my accounts. So simple to set this stuff up and roll things over.

I agree with the other people - open a Roth 401(k) and roll your current 401(k) into it. Forget it is there. Then go ahead and contribute to your new plan. It doesn't really matter where your money sits or in how many accounts... only difference between standard and Roth is when you pay taxes on the money.

My wife and I have two traditional 401(k)s, Roth 401(k), two Roth IRAs (unable to contribute thanks to income limits!), and now a SEP IRA, not to mention an investment account, two 529 college savings plans for the kids, and 4 checking and savings accounts (personal, home loan, one each for our businesses.) Yes our money is a little spread out, but it is just how things work. Keep track of it and you are fine.

Again, I cannot say enough good things about Fidelity. They've truly done a good job and make account tracking and investing very easy.

 

[edro]

I have not heard of many companies offering Roth 401k.
Maybe you should do their 401k and roll your Roth 401k into a private Roth IRA.

 

[jingramm]

but isn't it true that the more amount you hold in the account, the greater the vested interest that you earn over time? That's why I wanted to focus on one and not have my money spread around in various accounts

 

[Apple Of Sodom]

but isn't it true that the more amount you hold in the account, the greater the vested interest that you earn over time? That's why I wanted to focus on one and not have my money spread around in various accounts

No. Vesting has nothing to do with interest. For example, an employer may hire you on and give you a 401(k). You may not have the right to access that money until you are vested... this is a term the company spells out...such as you get 20% vesting per year. If you quit after 4 years you only receive 80% of the value of the 401(k). This is more of an incentive.

You earn interest the same in any account. And it really isn't interest per se. Your 401(k) or whatever type of account you have is invested into the market (stocks, bonds, securities, mutual funds, etc) and you earn money on your principle. You can either invest it yourself or have a fund manager take care of it for you. There is no guarantee you won't lose money either. For example, if you had a 401(k) and invested all of your money into Enron, you would be pretty pissed. As a matter of fact, with the collapse of the market recently there have been a lot of Americans going back to work because they saw their retirement fund (401(k), IRA, or whatever) completely decline in value. This markey fluctuation doesn't matter much to me because I am young and the market will bounce back...but for someone who only has 15 years left on this planet it is pretty devastating.

If you want a safe bet then you would just keep your money in a savings account. The only problem with that is you will only make MAYBE 2% interest on it...which isn't even enough to keep up with inflation. There is no risk, but there is also no real gain.

 

[HardcoreRobot]

traditional 401k up to match
roth ira to max
back to traditional until max

 

[CoinOperatedBoy]

Another vote for rolling over to your own Roth 401(k) or Roth IRA. Then contribute the maximum your company will match to your traditional 401(k). If you have more to invest, continue to fund the Roth.