Rollover 401(k) in Brentwood, MO
Rollover 401(k) in Brentwood, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many Brentwood, MO residents have found that seeking the help of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial advisors will help you get the most out of your savings. For rollover 401(k) consulting in Brentwood, MO, reach out to us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Brentwood, MO
In general, there are four different things you can do with your 401(k) account with your old employer. A knowledgeable Brentwood, MO financial advisor like those at Correct Capital will analyze your financial situation and help you determine which option is best for you. Depending on your current financial health and your time horizon, 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).
The last option is not advisable unless you need money now. Your previous employer would be required to take out 20% of the balance in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than 50% of the account's value.
It is important to note that many businesses in Brentwood, 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. Additionally, you may be required to cash out your plan if it has 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. There are a variety of benefits 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 shares of employer 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 remainder to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — instead of income tax, which may be substantially more.
Pick Your Own Custodian
When you opt to put your retirement funds in a 401(k), your employer will decide the 401(k) company holding 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.
A Wider Range of Investment Options
While some Brentwood, MO companies provide 401(k) plans with few limitations on your 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have various 401(k) plans with previous employers, there are many advantages to merging all of your savings into one place. That will make it easier to track how your savings are growing and managing them will be more streamlined. You could also see greater long-term gains.
Keep Contributing 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. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have more than two decades of experience advising both individuals and families and business owners in Brentwood, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll help you navigate special 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 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 funds are better off in a 401(k) plan; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan rather than an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are reasonable and you're getting strong returns, it may make the most sense 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 both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. A 401(k) may be best if you're considering early retirement.
- Loans from an IRA are not allowed. 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 know that you cannot take a loan out of an IRA.
- Your employer may match your 401(k) contributions. 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 stick with a 401(k) your employer will match your contributions.
Check out 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
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
Rollover 401(k) in Brentwood, MO | Correct Capital
At Correct Capital, we give all of our clients personalized guidance and tailor our services and advice to their current financial health, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Brentwood, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical obligation to oversee your account in a way that benefits you and only you. As an independent firm, we are free to be straightforward and unbiased, and there are no restrictions to the services or investment options we can recommend.
Call us today at 314-930-401K or contact us online to schedule an appointment with one of our professional 401(k) specialists and financial planners today.
