Rollover 401(k) in Central West End, MO
Rollover 401(k) in Central West End, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Central West End, MO 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 experienced team of 401(k) specialists and financial advisors will help you understand your options. For rollover 401(k) counseling in Central West End, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Central West End, MO
Typically, you have four options when considering whether to roll over your 401(k). A professional Central West End, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may recommend to:
- Leave the funds 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;
- Take the cash value out of your 401(k).
Taking out the cash value is not recommended unless you need money now. Your previous employer would be required to withhold 20% of the savings in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to note that many companies in Central West End, MO require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Additionally, you may be required to cash out your plan if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Central West End, MO
Your Central West End, 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 difference between the cost basis and current value of shares of employer stock in your retirement account. 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 usually 15% but can go up to 20% for people with high-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. By rolling over to an IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Central West End, MO employers offer 401(k) plans with few limitations on your 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 change jobs frequently, it may make the most sense to merge the entirety of your retirement funds into one place. That will make it easier to follow how your investments are growing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Continue Adding Money 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 business owners in Central West End, MO with a variety of 401(k) services. When you retain our services, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in Central West End, MO
Each of our client's financial situation is unique, and your Central West End, MO retirement planners at Correct Capital may recommend that your investments are better off in a 401(k) account; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees aren't too high and the return on investment is good, there may not be a great reason to roll over your 401(k). If the account stops giving you strong returns or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, you will not face a 10% early withdrawal fee taking money out of a 401(k) once you have turned 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 recommended, 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 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.
Take a look at some of the other services we offer in Central West End, 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 Central West End, 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 nearly a century of combined experience assisting Central West End, MO 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 are free to be straightforward and objective, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) experts and retirement planners today.
