What should I do with my profit sharing plan check?
I received a $12K check from my profit sharing plan because my employer is retiring. Should I open a traditional Or Roth IRA? I don't have any retirement accounts and am only working part time.
Thank you for the question. Essentially what you are looking at is a rollover. Here is an IRA chart and article on what you can and can't do with rollovers. It would appear that you will need to roll it into a traditional IRA first, and then if you want to have a Roth IRA, you can do a Roth Conversion after the rollover is complete.
I would encourage you to meet with a CFP professional to help work through what your options are and what would be most appropriate for your situation.
This is a tricky question and you have to be careful with your decision. First and foremost, assuming these funds were pretax dollars when they were made to the original plan, you can create an IRA rollover as long as you do so within 60 days of the date of the check. Regardless of what you do, make sure you do this immediately. Once the funds are in your IRA rollover, you can then decide if you want to convert them to a Roth IRA or to leave them alone. It’s also important to remember that you can only do one transfer a year regardless of the number of IRAs you have. It’s really a pity you took the check rather than have the funds sent directly to a custodian where you could have had a pre-established IRA rollover. If you are still within the 60 days, you have the option to create the IRA rollover and should do so immediately. Then you have bought yourself some time to make decisions and you should get some advice before you proceed any further. Hope this helps and good luck.