Rollover 401(k) in Central West End, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Central West End, 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 existing 401(k). Many Central West End, MO residents don't have the time, financial literacy, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial advisors will help you determine what makes the most sense for you. For rollover 401(k) counseling in Central West End, MO, give us a call at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Central West End, MO
Typically, there are four different things you can do with your 401(k) plan with your old employer. A experienced Central West End, MO financial advisor like those at Correct Capital will consider your financial situation and help you decide which option is best for you. Depending on your current financial health and your time horizon, it may be best to:
- Keep your 401(k) with your old employer;
- 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).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the balance for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. That means you might not even see 50% of the account's value.
One last consideration to note is that employers in Central West End, MO are allowed to make you move the money if your account 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 advantages to this strategy:
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 current value of shares of employer stock in your 401(k) account. If part of your 401(k) includes company stock, you can put that difference into a standard brokerage account, and roll the other funds to an IRA. In doing so, you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which is often higher.
Pick Your Own Financial Institution
When you opt to put your savings in a 401(k), you will not have any control over the 401(k) company that holds your money. When you do a 401(k) rollover to a Traditional or Roth 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 Array of Investment Options
While some Central West End, MO businesses offer 401(k) plans with few limitations on your investment options, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it may make the most sense to incorporate all of your savings into one plan. That will make it easier to follow how your savings are growing and managing them will be more streamlined. It may also be the better option for long-term growth.
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 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 20 years of experience assisting both individuals and business owners in Central West End, MO with A-Z 401(k) services. When you retain our services, we'll walk you through important considerations, such as what type of account makes the most sense for your time horizon.
Why Not to Roll Over Your 401(k) into an IRA in Central West End, MO
Every person's finances vary, and your Central West End, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan instead of 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 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 fees if you are 55. While both 401(k)s and IRAs permit 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. 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 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. While some employers will allow you to roll money out of your 401(k) to an IRA before retirement, 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 Central West End, MO:
- 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
- Retirement Calculator
- Retirement Planning
Rollover 401(k) in Central West End, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Central West End, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interested. As an independent firm, we are free to be honest and unbiased, and there are no restrictions to the services or investment opportunities we can recommend.