ok, I have this 401k from a job I had a few years back. I left the job and left the 401 account, and kinda forgot about it. my current job doesn't have a plan. I'm horrible with money and have a good deal of high interest credit card debt.
so last week, I was home sick and bored and actually opened a 401 statement and was shocked on several levels. first, I was surprised at how much money was in it, not a fortune (about 68k) but way more than I ever paid into it. second, in the last quarter of last year it lost a little more than 6%.
so I thought why am I carrying debt and paying all this interest while this money is sitting there, gradually being depleted? I called and told them to send it to me. they made me talk to a counselor, who was good but couldn't change my mind.
I also found out it's lost another 4% in january, since the statement I was looking at. I wish I'd gotten it last september, but then I'd be dealing with it on this year's taxes.
so I will get this check and pay off my debt, cut up my credit cards and try to live within my means. but there will be money left over. I understand that I have 60 days to put it in an ira to avoid part of a 10% penalty.
this is my question: if I put it in an ira and that tanks like my 401 was doing, then I'll have nothing, right? if I pay the penalty, I'll have whatever's left over. that's seeming like a better way to go to me. what should I do? do I have other options?