I have a 401K plan that's worth about $6,000 from my ex-employer and the money is spread among 3 mutual funds. The plan administrator (AIG) wrote to tell me that they will start charging $150 a year to maintain my account. The fee is pretty steep for an account with just a few thousand dollars. I am considering to move the money to another company/bank to open an IRA or ROTH IRA there. Here are my questions:
- I assume that I'll have to "sell" the mutual funds and AIG probably will charge me a selling fee. If I ask them to send the check directly to another company/bank to open an IRA or ROTH IRA within 60 days, I won't have to pay ordinary income taxes or capital gain taxes and the 10% penalty?
- I think companies such as C Schwab, Edward Jones or a bank will handle the paperwork and the process for me. Is it true?
- I am currently on workers comp due to a work related injury and do not any earned income. It is likely that I won't have any earned income by the end of this year. With my situation, is an IRA better or ROTH IRA better, or does it make any difference? I was told that a 401K plan can only be rolled-over to a traditional IRA. Then I can convert the traditional IRA to ROTH IRA. If this is the case, is it worth to do so given I won't have any earned income this year?
- Since the amount is not much, should I just get a CD or should I get a mutual fund?
- I assume there won't be any tax consequences for the transfer from
Thank you for your help in advance.