How do you transfer money from a 401k to a Roth IRA?
At either Scottrade or Charles Schwab you can have them send your previous employer forms to do a trustee to trustee transfer. These forms will direct your 401k plan to send the money to the new custodian tax free. You can do this for either an IRA rollover (which is what you are eligible for, not a traditional IRA) or a Roth IRA. If you elect to do a ROTH, then you will receive a 1099 for the amount that was rolled over. So the entire amount in the 401k will be taxable in 2008. So if you have $10,000 in your 401k plan, that means you will pay probably $1500 in taxes on it. So you can withdraw it from the ROTH or pay it from other funds and leave the $10,000 in there (which would be the best thing to do.) People have different opinions on whether it is better to roll your money into an IRA or pay the tax now and roll it into a Roth. Since you are so young, the math probably favors the Roth. But depends on whether you have the discipline to keep it saved and what return you will actuall
