Rollover 401(k) in St. Louis
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in St. Louis. Moving to a new job in St. Louis can lead to new opportunities, but it can also lead to confusion about the best way to handle your 401(k) account with your previous employer. Many St. Louis residents don't have the time, knowledge, or interest to manage multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you understand your options and determine what makes the most sense for you. For rollover 401(k) services in St. Louis, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in St. Louis
Generally speaking, you have four options when considering whether to roll over your 401(k). A qualified St. Louis financial advisor like those at Correct Capital will be able to look at your finances and help you determine which option is best for you. Depending on your specific circumstances, it may be best to:
- Keep your 401(k) with your old employer;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
The last option 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 would also have to pay federal, state, and local taxes. Meaning, you could potentially lose more than 50% of the account's value.
It is important to note that many employers in St. Louis require you to move the funds in your 401(k) if it has less than $5,000 in it. Additionally, they may be able to cash out your account if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in St. Louis
Your St. Louis financial advisors at Correct Capital may counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. There are a variety of advantages and benefits to this strategy:
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 current value of shares of employer stock in your retirement plan. If part of your 401(k) includes company stock, you can put that portion of your account into a standard brokerage account, and roll the remainder to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — instead of income tax, which is often higher.
The Custodian of Your Choice
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
A Wider Range of Investment Options
While some St. Louis companies offer 401(k) plans with few limitations on your investment options, you will generally have much more control over and much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Consolidate Your 401(k) Plans
If you have multiple 401(k) plans with previous employers or change jobs frequently, it may make the most sense to combine the funds from all your accounts into one place. That will make it easier to track the performance of your funds and you will be able to manage them more directly. It may also be the better option for long-term growth.
Keep Contributing 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 may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over 20 years of experience helping both individuals and business owners in St. Louis with a variety of 401(k) services. When you hire Correct Capital, we'll walk you through special considerations, such as whether a traditional or Roth IRA is best for you, how a 401(k) rollover will affect your tax planning, which required minimum distribution model makes the most sense for you, and more.
When Not to Roll Over Your 401(k) into an IRA in St. Louis
Every person's finances vary, and your St. Louis retirement planners at Correct Capital may recommend that your savings and investments are better off in a 401(k) plan; either your previous employer's or your new one. Some of the advantages of a 401(k) plan over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees are reasonable and you're getting strong returns, it may make the most sense to keep your savings where they are. If you change your mind, the account doesn't perform as well, or the fees change in the future, you can still roll over your 401(k) at any time.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not face a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- 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, 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.
Rollover 401(k) in St. Louis | Correct Capital
At Correct Capital, we give all of our clients personalized attention and cater our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting St. Louis individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and moral imperative to manage your account in a way that benefits you and only you. As an independent firm, we will always be honest and objective, and there are no limitations to the services or investment options we can offer you.