I have two 401k's to roll into an IRA. I'm 31. What kind of IRA do I ...

You will get someone to open it for free. In fact, they will love you.

There are two kinds
Traditional and Roth.

Traditional works pretty much the same as your 401k but you have more options. You don?t pay income tax now, but rather when you withdraw the money. When I rolled mine over I did this because I already had not paid the taxes (as you have not) and didn?t want the big tax bill now.

Roth you pay the taxes on now, but the earnings are tax free. I do this with my new investments separate from my 401K because in the long run it will be cheaper.

I could maybe invest more the Traditional way, but I will then owe taxes on the amount that I make over 30 years and I don?t think that I will make enough on the tax portion alone to cover it. You are also betting on the tax rate a little.

There are ways to convert them slowly too. I never bothered, but I did listen and consider it. I?d just rather take the money I?d have to pay for the taxes to convert it and put that in the Roth now. I think it would probably be better in the long run if I did, but I have a hedge bet this way.

I will say this about 401Ks. You have to do them if there is a company match. There is no way to beat that even if it is a quarter on the dollar. There is no where else you make 25% on day one. But you have more options on you own, so after the match, do the IRAs. If you max them out (and you might as much as you have been putting in) then go back to the 401k

At 31 you probably want to invest fairly aggressively since you will get the best payoff in the long run and you have time to make up fluctuations but that depends on your personality. If you are going to kill yourself if you lose 20% next year that ain?t for you. I had years I lost that much, but overall I?ve done about 12% and that is fantastic.

Your investment guy will explain it all to you and talk about the options. I would talk to a few and make a choice. Pick the guy who thinks the most like you, but understands investing. Then if you want to add money or do something different or additional, stick with him.

Source: http://rothira.solve-up.com/roth-ira/i-have-two-401ks-to-roll-into-an-ira-im-31-what-kind-of-ira-do-i-want-and-why/

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