A 45-year old man earns $150,000 per year and is covered by his employer's 401(k) Plan. He quits his job and moves to a new company that has no retirement plan, but will also pay him $150,000 per year. He should be advised to:

A 45-year old man earns $150,000 per year and is covered by his employer's 401(k) Plan. He quits his job and moves to a new company that has no retirement plan, but will also pay him $150,000 per year. He should be advised to:


A. continue to make maximum annual contributions to his 401(k) Plan

B. roll his 401(k) Plan into a Roth IRA and continue to make annual contributions to the Roth IRA

C. roll his 401(k) Plan into a Traditional IRA and continue to make annual contributions to the Traditional IRA

D. request a distribution of the 401(k) and use the proceeds to buy a variable annuity


Answer: C.

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