We’re answering your letters today, but first, we’ll tackle a headline about the case against rolling over your 401(k) plan to an IRA. Most of us have heard why you should roll it over. Let’s now hear the flip side. With points such as the lack of a stable value fund, the fact that many IRA advisors are just salespeople, and 401(k) plans in general beat IRA performance, the author makes many points which, on the surface, sound like an open-and-shut case. But is that really ALL of the argument? We’ll discuss it today!

Plus, also in our headlines segment, one special interest group who loves fiduciary rules is arguing against one state that’s trying to put them into place. Do they have a good argument? What does that mean for advisors helping you with your planning in general? We’ll also tackle that big topic.

But then, we’ll spend most of the show on your letters, which today include a TON of Roth IRA questions, among others. How should you set up your Roth? What about the 5 year rule? How should you invest your money inside of your Roth? We’ll answer those, plus throw out the Haven Life Line, fire up Doug’s trivia question, and more.

Today’s episode is a great way to celebrate the first day of spring!

Thanks to the Murder Book Podcast for supporting StackingBenjamins. Check out Michael Connelly’s new Murder Book podcast wherever you get your podcasts, or at MurderBookPodcast.com.

Show Notes:

Open

Thanks to the Murder Book Podcast for supporting Stacking Benjamins. Check out Michael Connelly’s new Murder Book podcast wherever you get your podcasts, or at MurderBookPodcast.com.

<> Headlines

• ARA Reminds Nevada About ERISA – Again (NAPA)
• 12 Reasons Not To Roll Your 401(k) Into An IRA (Forbes)

<> Letters

Katie:

Hey guys! New listener here, looking for some advice.

I am 22 years old, recently graduated from college and have been working for a steady income for about 6 months now. My company pays for my housing, and will continue doing so for the next year and a half, so I have some extra income to play with. So far, I’ve been putting it all (about $1,500 a month), towards my student loans, and at this rate I’ll have them paid off by the end of the year.

My question is what to do with my income after I pay off my loans. I am already contributing heavily to my 401K, but I would like to start some sort of savings or investment account for shorter term expenses like possibly going back to school, vacations, a wedding, etc. I am not opposed to stocks, but I don’t want to be the one managing stock investments.

I am very good with managing my money, but I don’t know anything about the available options for this and which one I should pursue! It would be great if you guys could answer this question on the show, or point me in the right direction for any available resources!

Tom

I’m planning on rolling over a 401k, which contains both pre-tax and after-tax contributions. I understand that two separate checks can be cut by the plan administrator in order to direct the pre-tax portion to a traditional IRA and the after-tax portion to a Roth IRA. Specifically with regard to the rollover of the after-tax portion, will there continue to be a delineation between the principal amounts and the growth in the new Roth IRA account? I would like to retain my ability to withdraw the principal amounts prior to retirement without tax consequences.

Drew

I have a question about the 5 year rule for taking your contributions from a ROTH IRA (not that I plan to do it anytime soon). Is the 5 year waiting period just from the time you made your first contribution to your account, and then thereafter you can take all contributions at will? Or does the 5 year waiting period apply to each contribution you make and subject to 5 years before you can touch it? Thanks for all you guys do, I HAVE LEARNED A LOT from you guys and love the show. Keep up the great work!!

Chester

Hey guys. I like your show a lot and can’t wait to actually learn something one day. Maybe today will be the day? Thanks for taking this question. I have something retirement-related for you. I am 34 and I make between 80-100K/year. I live in NYC where taxes are high. My company has a regular and/or Roth 401K plan, with 4% matching. I contribute mainly to the Roth 401k but concerned I’m making an error. I could instead max out a regular 401K and contribute to a Roth IRA afterwards.

But that’s not so much the crux of my question but it’s related. Here is the question: My current partner is from a wealthy family and we will be getting married in the next few years. I wonder if that means when I am older I will inevitably be in a higher tax bracket as a result of inheritance?

Not sure if that even qualifies as taxable income and not sure it will affect our tax bracket. If it doesn’t bump me/us up, maybe I max a traditional 401k and then move on to a Roth IRA with additional savings.

<> Doug’s Trivia

• Where did the name of the season, “Spring”, come from?

<> Haven Life Line

• Elysse has a pension through work. Is depending on a pension a good idea? Should she be looking into other retirement accounts as well?

Join us Wednesday!