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 your existing 401(k). Many Belleville, IL residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Belleville, IL, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Belleville, IL
In general, you have four options when considering whether to roll over your 401(k). A experienced Belleville, IL financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on your specific circumstances, it may be best to:
- Leave the savings 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;
- Cash out your 401(k).
Cashing out is only truly an option if you need funds quickly. Your previous employer would be obligated to take out 20% of the funds for tax purposed. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Cashing out could leave you with less than 50% of your savings.
It is important to note that businesses in Belleville, IL are allowed to make you move the money 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 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 increase in value between the cost basis and market value of company stock in your 401(k) plan. If part of your 401(k) includes company stock, you can transfer that increase in value into a standard brokerage account, and roll the other funds 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 is often higher.
Pick Your Own Financial Institution
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 and the range of services they offer.
More Diverse of Investment Opportunities
While some Belleville, IL employers offer 401(k) plans that permit a wide array 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
Consolidate Your Savings Accounts
If you have various 401(k) plans with previous employers, there are many advantages to combining all of your savings into one plan. That will make it easier to track the growth of your funds and you will be able to manage them more efficiently. You could also see greater long-term gains.
Continue Adding Money 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. 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 help you determine if a 401(k) rollover is the best option for you. We have over 20 years of experience helping both individuals and families and business owners in Belleville, IL with a variety of 401(k) services. When you meet with us, we'll guide you through important considerations, such as which type of savings plan fits best in your portfolio.
Why Not to Roll Over Your 401(k) into an IRA in Belleville, IL
Each of our client's financial situation is unique, and your Belleville, IL retirement planners at Correct Capital may advise that your investments are better off in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan over an IRA include:
- If your current 401(k) plan works for you. If the fees are reasonable and you're getting strong returns, there may not be a good reason to roll over your 401(k). If the account doesn't perform as well or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid 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 earlier.
- Loans from an IRA are not allowed. 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 can put matching contributions into your 401(k) plan. 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.
Take a look at 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
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
Rollover 401(k) in Belleville, IL | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience helping Belleville, IL individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral obligation 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 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) experts and financial planners today.
