Before I joined the Navy, I worked for a company for 2 years and, unbeknownst to me, was part of their 401k (which I actually forgot about because I barely contributed). Anyways, about 6 months after I left them for the Navy, I found out that the $2,400 was put into a traditional wells fargo IRA. So I started to contribute to it, not really knowing anything about it (like the APY, which was a measly .05%). So, after setting up automatic deductions and getting the value up to $10,100 I realized that this is a glorified savings account. My question is, based on the Wells Fargo calculator, I should convert it to a Roth IRA. However, the conversion fee (based on the calculator) is almost $1,500.
But, I could just withdraw all the money from the IRA and be taxed on 10% of it, which would be $1,100.
Am I looking at this wrong? Because that is my first option, I do my primary checking/savings with Wells Fargo, but all of my investing with USAA and would prefer to use them for this as well.
Assuming no contributions and withdrawal 30 years from now:
If I don't convert: Value today = $10,100 After-tax value = $76,224.63
If you convert your current IRA to a Roth IRA and pay taxes from your existing IRA balance: value today: $8,585.00 After-tax value = $86,387.91
I determined the fee by taking my current value of $10,100 minus the $8,585 = $1515
Besides the 10% withdrawal penalty, is there a reason I shouldn't just close my wells fargo IRA and open a USAA one?