I need to rollover my 403(b) money

Dear Dollar Diva,
I'm 32 and single with no children. I just quit my job, and have about $50,000 in a 403(b) plan. My accountant wants me to roll it over into an IRA invested in a particular mutual fund. My new employer has a 401(k), which I plan to participate in, and I'm also thinking of contributing to a Roth IRA this year. Got any ideas?

Congratulations on your thrift. That $50,000 invested at 10 percent in an IRA or your new 401(k) will make you a millionaire in thirty years. Invest $500 a month in your 401(k) plan at 10 percent, and you'll accumulate another million in thirty years. You can't beat the magic of tax-deferral and compounding for wealth accumulation. But it's hard to earn 10 percent on your money if you chip away at it with heavy loads and expense ratios.

Accountant's recommendation

It sounds like your accountant has figured out that selling mutual funds can be a lot more rewarding than doing tax returns. If the fund he is recommending has a hefty load, the Diva would worry about a conflict of interest. Remember, if he recommends a no-load, low-expense fund, he feeds at an empty trough. If he recommends a fund with a 6 percent load, he feeds at a trough that puts $3,000 in his pocket, and you end up with only $47,000 left to invest.

Ask your accountant how much he's going to get out of the deal, and research the fund he recommends to see if it's worth it. Morningstar is the big daddy of independent mutual fund research, and its Web site is a good place to find information.

If you don't have the ticker symbol of the fund, just type in the fund's family name (i.e. Janus, Fidelity, Vanguard, Putnam) and all of the funds in that family will pop up. Click on the fund you're interested in and a "Morningstar Quicktake Report" will appear on your screen. Here are some of the things you'll learn about the fund:

• Annual returns for the past three years.

• Annual and/or annualized returns for as far back as 10 years, but you have to click the "View additional performance information" link for this.

• Chart showing the fund's performance vs. the category performance (i.e. large growth, mid-cap growth, large value, foreign) vs. the S&P 500 performance. You want your fund to do better than its category most of the time.

• Category rating: a measure of how well a fund has balanced risk and return relative to other funds in its category. Be careful, this rating does not include loads, so if the reading is "below average" and the fund has a big load, think "worse than below average."

• Sales charges (loads) and expense ratio. The Diva likes no-load funds with an expense ratio of around one percent, give or take. She doesn't mind a small redemption fee, one or two percent, if it goes back into the fund rather than into a salesman's pocket.

• Morningstar rating: Don't get too excited about the current rating; you'll get a better feel for the fund by clicking the "View ratings details" for three, five and 10 year ratings. A five-star rating is the best, one star is the worst.

Comparison shop for your future

Your next step is to compare the fund you're researching against no-load funds in the same category. Janus, Fidelity, Vanguard and T. Rowe Price all offer a variety of no-load funds to use for comparison.

You're on the road to becoming a multimillionaire, and mutual funds can get you there. Do yourself a favor and read The Sage Guide to Mutual Funds by Alan and Stephen Cohn. Knowledge will give you the power to make your retirement pot of gold runneth over.

You can also rollover your $50,000 into your new company's 401(k) plan. Consider this option if you like the funds that the plan is offering. When exploring your Roth options, the Diva's rule of thumb is to invest in any tax-deferred opportunities available to you such as a 401(k), tax deductible IRA or Keogh. Once you've exhausted your tax-deductible options, go for the Roth IRA.

DOROTHY ROSEN has a master's degree in finance, with a specialization in accounting, from the Kellogg Graduate School at Northwestern University in Evanston, Ill. Rosen has more than 15 years of experience in the financial arena, serving in Illinois and Florida as a certified public accountant, financial consultant, expert witness and educator. She is owner of Dorothy Rosen, CPA, a public accounting firm that serves individuals and small businesses.