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 also create confusion about the best way to handle the savings you have in your 401(k) account with your previous employer. Many Ballwin, MO residents don't have the time, knowledge, or interest to manage multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you understand your options. For rollover 401(k) services in Ballwin, MO, reach out to us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Ballwin, MO
Typically, you have four options when considering whether to roll over your 401(k). A experienced Ballwin, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and help you decide which option is best for you. Depending on a variety of factors, it may be best to:
- Leave the money 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 only truly an option if you need funds quickly. Your previous employer would be required to withhold 20% of the savings in order to pay taxes 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. Meaning, you could potentially lose more than half of your savings.
It is important to note that many companies in Ballwin, MO require you to move the funds in your 401(k) if your account 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 Ballwin, MO
Your Ballwin, MO financial advisors at Correct Capital may advise 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 increase in value between the original value and current value of shares of employer stock in your 401(k) account. If part of your 401(k) includes company stock, you can put that increase in value 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 the shares — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be substantially more.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your money. By rolling over to an IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More Diverse of Investment Options
While some Ballwin, MO employers offer 401(k) plans with few limitations on your investment opportunities, you will generally have much more control over an IRA than you would in a 401(k) plan. 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
Consolidate 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 entirety of your retirement funds into one plan. In doing so, it won't be nearly as much of a hassle to follow how your savings are performing and managing them will be more streamlined. 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. If you roll the funds out of your old employer's plan, 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 more than 20 years of experience advising both individuals and business owners in Ballwin, MO with a variety of 401(k) services. When you retain our services, we'll walk you through important considerations, for instance which type of savings plan fits best in your portfolio.
When Not to Roll Over Your 401(k) into an IRA in Ballwin, MO
Each of our client's financial situation is unique, and your Ballwin, MO retirement planners at Correct Capital may recommend that your savings are best kept in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan instead of an IRA include:
- If your current 401(k) plan works for you. If the fees aren't too high and your savings are growing as you'd like them to, there may not be a good reason to roll over your 401(k). 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 fees if you are 55. While you can begin taking out funds without a fee 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.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't advisable, 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 dollar-for-dollar 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 Ballwin, 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
- Social Security Consultants Near Me
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 achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Ballwin, 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 bound to act only in your best interested. As an independent firm, we will always be straightforward and unbiased, and we are not bound to only offer you limited investment options.
Reach out to us today at 314-930-401K or contact us online to schedule an appointment with one of our qualified 401(k) specialists and retirement planners today.
