What is the best type of tax-deferred savings plan to rollover a 401K Plan into?

I recently took an early retirement due to health issues. For the last 9 1/2 years that I was working I was depositing $50.00 a month into a 401K Plan. I realize that this is not a very large amount per month. However, over these 9 1/2 years I have only managed to gain approximately $2,000. Whether this is due to the small amount of money I contribute or the ups and downs of the stock market (probably both) it is rather discouraging. Now that I am retired I am allowed to roll over my 401K funds into another type of Individual Retirement Account or purchase an Annuity. I don't really understand how these options work. Is there a plan that might better serve my financial growth other than my 401K Plan, considering I am no longer making monthly deposits into it and the program that manages my 401K Plan is charging me $24.00 a year service fee?

Currently, you can only roll over your 401(k) into a Traditional IRA. 12 months later, you can then roll it over into a Roth IRA. You can only do one rollover once every 12 months. You should talk to an investment adviser who can help you find the suitable investments to meet your needs.

In almost every retirement plan, there is usually an annual custodial fee charged to the account. So $24 is really not much because the gains in your investments are usually able to cover the annual fee.

I'm shocked to hear that, according to what you've said, you have put in about $5700 and you only have $2000 now? That's just terrible.

That being said, I'd look at some Roth IRA's.

Shop like crazy to find the one with the lowest maintenance fees. Then just start buying no-load index funds.

If you only have $2000, put it into a Roth IRA. Talk to your bank.

I would move that money into a traditional IRA (as opposed to a Roth IRA). There are thousands of mutual funds in America. Just go do some research and find one you like. Read a couple of issues of Money magazine, or Kiplingers or something similar.

There is lots of online help from msn, or from mutual funds like Vanguard, Fidelity, T Rowe Price, American, and many others.

I don't know your age or tolerance for risk. But starting in 1993, I have put my old 401(k) or 403(b) money into American's Investment Company of America, and I am satisfied with the results. It may not be the leader of the pack in a good year, but it sure knows how to control loss in a bad year. And that has value for someone looking to retire. And of course, if you are eligible under IRS rules, you can make additional contributions to an IRA.

Good luck to you.

can get no fee Ira rollover @ schwab. Right around 2000 were some bad yrs for market and the amount is very small. Forget annuities - high fees and poor investment. Of only $2000 total then $1000 Jaosx & $1000 SWPIX would be a solid base. Need to build income outisde IRA with FAX and similiar holdings. Feel fee to contact via answers if have more info or qs.

Very good question!!!
Well, you said you retired early, so I assume that means your under 59 1/2 years old. If you want to roll that over to another type of retirement account to keep it tax deferred, then a "Rollover IRA" is your solution. This will allow you to keep it tax deferred and continue to grow. This can be done easily at your Bank, Credit Union or Brokerage Firm. Any of them could set you up with a good Mutual Fund to allow your money to continue to grow. Also your Insurance Person could help, but if they offer you an Annuity, don't bite because an Annuity is a tax deferred account, and you your Rollover IRA is already tax deferred. What I would do is go to the Website of a good Mutual Fund like Fidelity, American, or Vanguard just to name a few (there are many other great ones), and see their programs. You will find it easy and painless and certainly a lot cheaper than your current situation. Hope this helps!!! Good luck.

To Yanswers and John S. The asker did not say he only has $2000 now. He said he has a gain (profit) of $2000 to add to the $5700 he put in. And you can not roll a 401k directly into a ROTH IRA, you must first roll it into a traditional IRA.

I agree with another responder's suggestion to call T. Rowe Price, Fidelity, Vanguard, Oakmark, or other good no load, low fee fund families and ask them about your options and what will fit with your other investments, pension, risk tolerance etc.