Rollover 401(k) in Concord, MO
Rollover 401(k) in Concord, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your 401(k) account with your previous employer. Many Concord, 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 experienced team of 401(k) experts and retirement consultants will help you understand your options. For rollover 401(k) services in Concord, MO, call us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Concord, MO
Typically, there are four ways to approach your 401(k) rollover. A experienced Concord, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards what will work best for you. Depending on your current financial health and your time horizon, we may recommend to:
- Leave the funds in your former employer's 401(k) plan;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Take the cash value out of your 401(k).
The last option is not recommended unless you need money now. Your previous employer would be required to take out 20% of the savings for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than 50% of the funds.
It is important to mention that companies in Concord, MO are allowed to make you move the money if your plan has less than $5,000 in it. Furthermore, you may be required to cash out your plan if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Concord, MO
Your Concord, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits to this strategy:
Pay Less in Taxes With Special Rules if You Have Publicly Traded Company Stock in Your 401(k)
Net unrealized appreciation (NUA) is the increase in value between the cost basis and current value of shares of employer stock in your 401(k) plan. If you won shares of your previous company in your 401(k), you can put that difference into a standard brokerage account, and roll the remainder to an IRA. In doing so, you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your money. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on stability, trading technology, and financial services.
A Wider Array of Investment Options
While some Concord, MO companies offer 401(k) plans that permit a wide range of investment options, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to merge the funds from all your accounts into one account. That way, you much much more efficiently track how your investments are performing and you will be able to manage them more directly. Sustained long-term growth may also be more attainable.
Keep Contributing to Your Accounts
While your money will still grow in you old 401(k) plan, you will no longer be able to contribute more savings to it. By rolling over the funds into an IRA, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have more than two decades of experience advising both individuals and families and business owners in Concord, MO with numerous 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance whether a traditional or Roth IRA is best for you.
Why to Avoid a 401(k) Rollover in Concord, MO
Depending on your time horizon and other considerations your Concord, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are fair and your savings are growing as you'd like them to, it may make the most sense to keep your savings where they are. If the account stops giving you strong returns or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal penalties if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. While some employers will allow you to roll money out of your 401(k) to an IRA while you are still working, it may make more sense to keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
See some of the other services we offer in Concord, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
Rollover 401(k) in Concord, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Concord, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to manage your account in a way that benefits you and only you. As an independent firm, we will always be straightforward and unbiased, 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.
