Question: I am 27 and have a Roth IRA account with Wachovia. This plan was started under my last employer but I am currently unemployed and am not too optimistic about finding another job with a retirement plan option anytime soon. Meanwhile, Wachovia says that I have to do something with the ~$4,700 that I have in my plan because I'm under the $5,000 limit required to be able to just let the money sit in my old employer's plan. So I am assuming I need to roll it over. Is there a penalty for rolling the balance over into a new Roth IRA Plan? Are there any taxes on that kind of move if I roll over the total balance? Should I stick with Wachovia when opening a new Roth IRA plan? Thank you! Jenny, Madison, WI

Answer: I am assuming this is a Roth-401(k) or Roth 403(b) since the plan was started by your last employer. You can roll it over into a Roth-IRA at any financial institution you want, from a credit union to a mutual fund company to a major bank. (It's pretty hard to find a financial institution that doesn't manage IRAs.)

There is no penalty or tax hit with a rollover. The easiest way to do one is to make a "direct" rollover from the employer-sponsored plan into your new Roth IRA. In essence, you never touch the money. Instead, it travels from one institution into another institution. You don't have to do it this way, but it makes it easy to avoid complications.

As you may know, my mantra is to stick with low-cost low-fee products. So, wherever you decide to put the money make sure the fees are low. A good short primer on the investing basics is The Random Walk Guide to Investing: Ten Rules for Financial Success by Burton Malkiel. Another possibility is my chapter on investing in my new book, The New Frugality: How to Consume Less, Save More and Live Better.

Follow Chris Farrell at @cfarrellecon