401(k) retirement accounts

[knightrunner]

Does anyone here contribute to a 401(k)? I had one at my last employer, but at my current job, it is not available. I was just wondering if it is possible for an individual to invest in a 401(k) even if their employer does not offer this service.

[carol b]

Ok it appears that you can not. You can however roll it over into a Roth IRA. From the sounds of things this is a good option as there are great differences in the taxation of the two.

A Traditional 401k is through your employer and contributions are made prior to taking taxes out of your check so your payroll tax is less. You haven't paid taxes yet on this money. When you take withdrawals out in retirement you will pay the tax on it. A Rollover IRA is when you leave an employer and you take the money out of your 401k and roll it over into an IRA with a brokerage or bank.
The Roth IRA was introduced under the Taxpayer Relief Act in 1997. The main advantage is its tax structure. Contributions to a Roth IRA are made from earned income that has already been taxed. Since you have already paid taxes on the money, you don't pay federal taxes when you make withdrawals from your Roth IRA. You also don't pay capital gains tax on any earnings your investments made in the account.

As you know when you decide to take out a loan on your 401k you are taxed. If you just clean out the account you are taxed. You would probably be best of trying this as it may be difficult to convince your new employer to get a 401k started.