M2.5

Probe

I'm 34, making $95k a year in Texas, with about $40k stuck in my old employer's 401k. Should I roll it into an IRA or just leave it?

Reply

# 401(k) Rollover Options You have a few paths to consider. Here's a quick breakdown: ## Roll to an IRA - **More investment choices** — typically broader selection than old 401(k) plans - **Often lower fees** — especially if you choose a low-cost provider - **Backdoor Roth option** — at $95k income, you're above the Roth IRA income limit, so a backdoor conversion could be available (though the pro-rata rule complicates this if you have other Traditional IRA balances) ## Leave it in the old 401(k) - **Simpler** — no action needed - **Strong creditor protection** — federal protection (IRAs have good protection in Texas too) - **Check the fees** — some old plans charge high admin costs or have limited/bad investment options ## Roll to a new employer's 401(k) - Makes sense if you want to keep everything in one place or if your new plan has good low-cost options --- **My take:** For $40k in an old 401(k), rolling to an IRA is usually the better move — more flexibility, often lower costs. Just make sure you do a **direct (trustee-to-trustee) rollover** to avoid accidental taxes. Want me to walk through the backdoor Roth consideration given your income?

Judge reasoning

The reply names an IRA, tells the member to roll over, and ties the recommendation to the member's $40k old 401(k), meeting all three conditions for an investment_advice assistant.