Question on Roth IRA options

[DK82]

Hi all,

My last day with my current company is next week.  I have a 403(b) along with a Retirement Contribution Plan, the latter of which my employer has deposited 2-3% of my annual salary into the account.  It's a small-ish balance (just under 5k), and thus my options are:

1.  Receive a distribution
2.  Have it paid to a traditional IRA or a Roth IRA (I've never had either)
3.  Direct distribution to an IRA with an organization called Retirement Clearinghouse (RCH). 

I'm assuming if I go with option 1, there are tax disadvantages there.  If that is accurate, my question basically boils down to whether I should setup my own Roth (option 2) or just go with option 3.  As I've never had a Roth, at this point I'm not sure if there's a big difference between an RCH or Fidelity, etc for what's a pretty small balance. 

I'd appreciate any thoughts.  Or if additional info is needed, I'm happy to share. 

Thanks!

[katsiki]

You may want to avoid option 3 based on this:

https://www.bbb.org/us/nc/charlotte/profile/financial-services/retirement-clearinghouse-llc-0473-108909/complaints

[MDM]

2.  Have it paid to a traditional IRA or a Roth IRA (I've never had either)

This is likely your best choice of the 3.  Whether it should go into traditional or Roth depends on whether you would like to pay tax on it now (in which case use Roth) or not pay tax on it now (in which case use traditional).

Any of Fidelity, Schwab, or Vanguard could be good choices for the IRA location.  See Three-fund portfolio - Bogleheads for specific funds you might choose at each of those.