Rollover 401(k) in Ballwin, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Ballwin, MO. While moving to a new job can be a welcome change, it can also create uncertainty about the best way to manage the savings you have in your existing 401(k). Many Ballwin, MO residents have found that enlisting the services of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement planners will help you understand your options. For rollover 401(k) advice in Ballwin, MO, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Ballwin, MO
Typically, there are four ways to approach your 401(k) rollover. A qualified Ballwin, MO financial advisor like those at Correct Capital will analyze your financial situation and help you decide which option is best for you. Depending on a variety of factors, it may be best 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 should only be considered if you need funds quickly. Your previous employer would be required to take out 20% of the savings to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to note that many employers in Ballwin, 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. Furthermore, 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 Ballwin, MO
Your Ballwin, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of advantages 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 company stock in your 401(k) plan. If part of your 401(k) includes company stock, you can transfer that difference into a standard brokerage account, and roll the remainder to an IRA. This way, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More of Investment Options
While some Ballwin, MO companies provide 401(k) plans with few limitations on your investment options, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to incorporate all of your savings into one account. In doing so, it won't be nearly as much of a hassle to follow how your investments are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
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. If you roll the funds out of your old employer's plan, 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 two decades of experience assisting both individuals and business owners in Ballwin, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, for instance how a 401(k) rollover will affect your tax planning.
When Not to Roll Over Your 401(k) into an IRA in Ballwin, MO
Depending on your time horizon and other factors your Ballwin, MO retirement planners at Correct Capital may advise that your funds should be left in a 401(k) account; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan instead of an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are fair and the return on investment is good, it may be advisable 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 fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 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 typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, it is important to note that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Check out some of the other services we offer in Ballwin, MO:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
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 objectives. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience aiding Ballwin, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we are legally and ethically obligated to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be honest and unbiased, and there are no restrictions to the services or investment options we can offer you.