Rollover 401(k) in Arnold, MO
Rollover 401(k) in Arnold, MO. While moving to a new job can be a welcome change, it can also create uncertainty about the best way to manage your 401(k) account with your previous employer. Many Arnold, MO 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 experienced team of 401(k) experts and retirement consultants will help you get the most out of your savings. For rollover 401(k) consulting in Arnold, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Arnold, MO
In general, you have four options when considering whether to roll over your 401(k). A knowledgeable Arnold, MO financial advisor like those at Correct Capital will be able to look at your financial situation and guide you towards your preferred option. Depending on a variety of factors, we may advise to:
- Keep your 401(k) with your old employer;
- Roll over your 401(k) to a plan with your new employer;
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
Cashing out is not recommended unless you need money now. Your previous employer would be obligated to take out 20% of the balance for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could potentially lose more than 50% of your savings.
One last consideration to note is that many companies in Arnold, MO obligate you to roll over the funds to an IRA or new 401(k) if your plan has less than $5,000 in it. Additionally, they may be able to cash out your account if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Arnold, MO
Your Arnold, MO 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 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 increase in value between the cost basis and current value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can transfer that increase in value into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. In doing so, you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — instead of income tax, which may be significantly more.
Pick Your Own Financial Institution
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some Arnold, MO businesses offer 401(k) plans that permit a wide range of investment opportunities, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you change jobs frequently, it may make the most sense to combine all of your savings into one account. That way, you much much more efficiently track how your investments are growing 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 you will still see return on your investments 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 will be able to supplement your savings.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience helping both individuals and business owners in Arnold, MO with numerous 401(k) services. When you retain our services, we'll help you navigate special considerations, such as required minimum distribution model makes the most sense for you.
Why Not to Roll Over Your 401(k) into an IRA in Arnold, MO
Every person's finances vary, and your Arnold, MO retirement planners at Correct Capital may advise that your funds are best kept in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. If the fees are reasonable and your savings are growing as you'd like them to, it may be your best option to keep your savings where they are. You are not required to roll over a 401(k) immediately, so you are free to change your mind and transfer the funds at a later date.
- No early withdrawal penalties if you are 55. While you can begin taking out savings without a penalty from either 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 a few years early.
- 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. Employers may contribute a full or partial match into a 401(k), while an IRA would only include the money you put into it.
Click on the links below to see some of the other services we offer in Arnold, 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 Arnold, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Arnold, MO individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we are legally and ethically required to act only in your best interested. As an independent firm, we will always be direct and objective, and we are not bound to only offer you limited investment options.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) specialists and retirement consultants today.
