Rollover 401(k) in Brentwood, MO
Rollover 401(k) in Brentwood, MO. Starting a new job in Brentwood, MO is exciting, but it can also lead to uncertainty about the best way to manage your 401(k) account with your previous employer. Many Brentwood, MO residents have found that enlisting the services 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 retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Brentwood, MO, reach out to us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Brentwood, MO
Typically, there are four ways to approach your 401(k) rollover. A experienced Brentwood, MO 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 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 only truly an option if you need funds quickly. Your previous employer will have to withhold 20% of the savings for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the funds.
One last consideration to note is that companies in Brentwood, MO are allowed to make you move the money if your account 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 Brentwood, MO
Your Brentwood, 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. This is beneficial for several different reasons:
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 original value and current value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can put that difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. This way, you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — rather than income tax, which may be substantially more.
The Custodian of Your Choice
When you opt to put your retirement funds in a 401(k), you will not have any control over the 401(k) company that holds your funds. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
More Diverse of Investment Opportunities
While some Brentwood, MO companies provide 401(k) plans that allow for a wide array of investment options, 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, there are many advantages to incorporating 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.
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 understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over two decades of experience assisting both individuals and business owners in Brentwood, MO with a variety of 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance what type of account makes the most sense for your time horizon.
Why to Avoid a 401(k) Rollover in Brentwood, MO
Depending on how close you are to retirement and other considerations your Brentwood, MO retirement planners at Correct Capital may advise that your investments are best kept in a 401(k) account; whether that be 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 you're getting strong returns, there may not be a great reason to roll over your 401(k). If the account doesn't perform as well or you change your mind for another reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal fees 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. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, it is important to mention that you cannot take a loan out of an IRA.
- Your employer can put matching contributions into your 401(k) account. While some employers will allow you to roll money out of your 401(k) to an IRA while you are still working, it may make more sense to keep contributing to your 401(k) your employer will match your contributions.
Take a look at some of the other services we offer in Brentwood, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Brentwood, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting Brentwood, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we are legally and ethically obligated to act only in your best interested. As an independent firm, we will always be straightforward and objective, and there are no restrictions to the services or investment options we can offer you.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and retirement planners today.
