New job in 12 days, roll over advice needed

[SuperSaver]

Hi! I resigned last week from Financial company #1 and am starting a new job at financial company #2. I have $7,000 in my company 401k (invested in our companies 401k platform).

I am 26 years old, make approximately $42,000/ year and will be getting married in April 2017 (household income is about $79,000). I am aggressively paying off higher interest student loans so only putting in 7% and getting a 4% match.
I think I want to roll my 401k into a vanguard account (neither of my companies)

 My questions:
Roth IRA? Or Traditional IRA? Why?
Which funds should I choose? I intend to work until 45 at least. Probably until 50.
Please help. I've never had a retirement account to roll over before. Thanks!!
I spent all of my hsa on the dentist this year so I don't need to roll that over at least. 

[seattlecyclone]

Before you make the decision to roll over to an IRA, take a look at your new employer's 401(k) options. Many companies, especially larger ones, have 401(k) plans with Institutional funds that have lower fees than you can get on your own in an IRA. If that's the case for your new employer, consider rolling it all into the new 401(k) instead of opening an IRA.

Roth IRA? Or Traditional IRA? Why?

If your 401(k) funds are Roth already, Roth IRA is your only option. If your 401(k) funds are pre-tax, moving it to a traditional IRA means the money stays pre-tax. If you convert to Roth, you'll owe tax on the entire sum in the year you make the conversion. This could be something you want to do, especially if you believe your marginal tax rate will never again be lower than it is now, but leaving it traditional is probably a good choice.

Which funds should I choose? I intend to work until 45 at least. Probably until 50.

What is your desired asset allocation? What percentage of your money do you want to have in stocks vs. bonds? What percentage do you want to have in US vs. international? This is something you'll need to decide for yourself based on your risk tolerance. Once you have made this decision, we can give you some advice about good funds to meet this objective. Something like a Vanguard Target Retirement fund or Vanguard's LifeStrategy Growth fund can be a fine option to park all of your money until you decide otherwise.

[mskyle]

Roll it over to a traditional IRA. It makes sense given your current income level, and you can always convert it to a Roth later if you want; anyway if you convert your pre-tax 401k money to a Roth now you will owe taxes on it now. Might as well let it continue to grow pre-tax.

Also, though, you don't need to do this right away. I just last year got around to rolling over my retirement accounts from my first job after college that I had left 15 years before. Like, it's a good idea to do it soon if you're going to do it, but don't worry too much, you can do this whenever. If you're going to roll over to your new employer's plan, you do need to do that right away, though.

As for how to invest it, there are a million ways to go. I agree with seattlecyclone that a Target Date fund is a good option while you learn more.

[Dansandiego]

If you are not 100% vested then I would leave it with the current employer for about 6months. I've had multiple employers accelerate vesting based on an acquisition event which occurred after my employment, but resulted in fully vesting all plan participants.

But after my last paycheck and bonus/etc are received then I do roll over to a Vanguard rollover IRA. It provides the most investment options with the lowest fees.

[MustacheAndaHalf]

$7,000 invested in Vanguard Total Stock Market ETF would be at 0.05% annual fee, or $3.50/year.  An institutional version might cost $1/year, saving you $2.50/year.  Given the level of savings is so small, you might put more value on being able to select funds.

I'd favor a rollover at Vanguard, and then converting into a Roth IRA.  After your standard deduction / standard exemption you're only being taxed on $32k/year, less your 401(k) contributions making it about $25k/year.  In the 15% tax bracket it's very appealing to lock that rate in, and convert to a Roth IRA.  Your income could go up in the future, and taxes in general could go up.  So a Roth IRA removes uncertainty and probably does better than your future tax rates.

So my suggestion would be to do this in two steps: first, have Vanguard transfer your old 401(k) into a Traditional IRA.  That means pre-tax money arrives at Vanguard as pre-tax money.  Then once it's at Vanguard, you can make a Roth conversion online (or call Vanguard if you prefer, or mail the forms).  You will owe just over $1k tax on your $7k Roth conversion in the 15% tax bracket.

[SuperSaver]

Hi, thanks for the advice. I appreciate it. I decided to hold off on doing anything until after my series 7 at the end of the year. I have to show my new company my 401k info and disclose I believe before I can sit for the exam. I looked at the info and their employee accounts gives us 30 free trades a month and access to institutional shares so it's kind of overwhelming trying to decide that over vanguard where I can just set it and forget it. Currently working/studying 8-12 hour days 6-7 days a week to get ready. I don't really have the brain capacity to figure it all out so I'll let it ride the 3-6 months suggested. Thanks again for the help.