Quote:
Originally Posted by gar1976
Rolling over from a 401(k) to a regular IRA is a tax-free event, better luck next time.
Regular IRA accounts also use pretax dollars. ROTH IRA accounts are post-tax contributions.
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You have K.O.-ed The Correct.
It's called a Rollover IRA, and is tax-exempt. You roll your 401(k) into the Rollover IRA when you leave the company, and then at a later date can migrate this cash into something like a Roth IRA. This is what I'm doing next year with the money from my 401(k), because I'm spending a few years as an underemployed student, and will pay next to nothing in taxes when I convert my Rollover into a Roth.
At your age, either is fine, and it's great that you are considering a retirement account. I was dumb when I was 18 and working full-time for a company that matched 25% on the 401(k) offered to its employees; I could have thrown a whopping $100 a month in my 401(k), gotten knocked down a tax bracket, and had an extra $25 a month in my retirement account, all for free. Don't be dumb like I was.