Rollover 401(k) in Belleville, IL
Rollover 401(k) in Belleville, IL. Starting a new job in Belleville, IL can lead to new opportunities, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Belleville, IL residents have found that enlisting the services of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in Belleville, IL, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Belleville, IL
Typically, there are four ways to approach your 401(k) rollover. A knowledgeable Belleville, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on a variety of factors, we may recommend to:
- Leave the savings in your former employer's 401(k) plan;
- 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).
Taking out the cash value is only truly an option if you need funds quickly. Your previous employer would be required to withhold 20% of the savings for tax purposed. Depending on how close you are to retirement, the IRS may also take a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Cashing out could leave you with less than 50% of the funds.
It is important to note that employers in Belleville, IL are allowed to make you move the money if your account has less than $5,000 in it. Lastly, 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 Belleville, IL
Your Belleville, IL financial advisors at Correct Capital may counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. 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 difference between the original value and market value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), 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 — instead of income tax, which may be substantially more.
The Custodian of Your Choice
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 have your pick of institutions based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some Belleville, IL employers provide 401(k) plans that allow for a wide array 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
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to merging the entirety of your retirement funds into one account. That will make it easier to track the performance of your funds and managing them will be more streamlined. It may also be the better option for long-term growth.
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 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 helping both individuals and families and business owners in Belleville, IL with numerous 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, for instance which type of savings plan fits best in your portfolio.
Why Not to Roll Over Your 401(k) into an IRA in Belleville, IL
Depending on how close you are to retirement and other considerations your Belleville, IL retirement planners at Correct Capital may advise that your funds are best kept in a 401(k) account; either your previous employer's or your new one. Some reasons to choose a 401(k) plan over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high 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.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out money without a penalty from both a 401(k) or IRA at 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you're considering early retirement.
- You cannot take a loan out of an IRA. 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 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 Belleville, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Belleville, IL | Correct Capital
At Correct Capital, we give all of our clients personalized attention and tailor our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience assisting Belleville, IL individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we are free to be honest and objective, and there are no limitations to the services or investment options we can recommend.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and financial planners today.
