Rollover 401(k) in Ballwin, MO
Rollover 401(k) in Ballwin, MO. Starting a new job in Ballwin, MO can lead to new opportunities, but it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many Ballwin, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial planners will help you get the most out of your savings. For rollover 401(k) advice in Ballwin, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Ballwin, MO
In general, there are four ways to approach your 401(k) rollover. A experienced Ballwin, MO financial advisor like those at Correct Capital will consider your financial situation and guide you towards your preferred option. Depending on your current financial health and your time horizon, it may be best to:
- Leave the funds in your former employer's 401(k) plan;
- Roll over your 401(k) to a plan with your new employer;
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Take the cash value out of your 401(k).
Taking out the cash value is not advisable unless you need money now. Your previous employer will have to withhold 20% of the balance to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. Cashing out could leave you with less than 50% of the funds.
Another thing to note is that many employers in Ballwin, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Furthermore, they may be able to cash out your account if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Ballwin, MO
Your Ballwin, MO financial advisors at Correct Capital may recommend rolling over your 401(k) into an Individual Retirement Account (IRA). This is beneficial for several different reasons:
Take Advantage of Special Rules if You Have Publicly Traded Company Stock in Your 401(k)
Net unrealized appreciation (NUA) is the difference between the original value and market value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can put that portion of your account into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. The advantage of this is that you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — rather than income tax, which may be considerably more.
The Financial Institution of Your Choice
When you opt to put your savings in a 401(k), the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Ballwin, MO companies offer 401(k) plans with few limitations on your investment options, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to combine the funds from all your accounts into one place. That will make it easier to track how your savings are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
Continue Adding Money to Your Accounts
While you can still reap the benefits of the investments and savings that are already there, you won't be able to add funds to a 401(k) plan with your previous employer. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over 20 years of experience assisting both individuals and business owners in Ballwin, MO with a variety of 401(k) services. When you retain our services, we'll help you navigate important considerations, for instance required minimum distribution model makes the most sense for you.
Why to Avoid a 401(k) Rollover in Ballwin, MO
Every person's finances vary, and your Ballwin, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and you're getting strong returns, there may not be a great reason to roll over your 401(k). If the account stops performing or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While you can begin taking out money without a penalty from both a 401(k) or IRA at 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While typically not advisable, if you are in a situation where you need to take out a loan from your retirement savings, it is important to mention that you cannot take a loan out of an IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Check out some of the other services we offer in Ballwin, MO:
Rollover 401(k) in Ballwin, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their goals. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Ballwin, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we are legally and ethically bound to oversee your account in a way that benefits you and only you. As an independent firm, we are free to be honest and objective, and we are not bound to only offer you limited investment opportunities.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and retirement planners today.
