Rollover 401(k) in Chesterfield, MO
Rollover 401(k) in Chesterfield, MO. Moving to a new job in Chesterfield, MO can lead to new opportunities, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Chesterfield, MO residents don't have the time, expertise, or interest to manage multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial advisors will help you get the most out of your savings. For rollover 401(k) consulting in Chesterfield, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Chesterfield, MO
Typically, there are four different things you can do with your 401(k) plan with your old employer. A experienced Chesterfield, MO financial advisor like those at Correct Capital will consider your finances and guide you towards your preferred option. Depending on a variety of factors, it may be best 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;
- Cash out your 401(k).
Cashing out should only be considered if you need funds quickly. Your previous employer will have to take out 20% of the funds for tax purposed. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could potentially lose more than half of the account's value.
One last consideration to note is that companies in Chesterfield, MO are allowed to make you move the money if your account has less than $5,000 in it. Furthermore, you may be required to cash out your plan if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Chesterfield, MO
Your Chesterfield, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). 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 original value and current value of shares of employer stock in your 401(k) plan. If you won shares of your previous company in your 401(k), you can put that increase in value 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 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
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 money. By rolling over to an IRA, you'll have your pick of institutions based on stability, trading technology, and financial services.
A Wider Range of Investment Options
While some Chesterfield, 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. IRAs typically allow investment in almost any type of asset, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to combine all of your savings into one account. That way, you much much more efficiently track how your savings are performing 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 helping both individuals and families and business owners in Chesterfield, MO with numerous 401(k) services. When you meet with us, we'll guide you through important considerations, for instance required minimum distribution model makes the most sense for you.
Why to Avoid a 401(k) Rollover in Chesterfield, MO
Each of our client's financial situation is unique, and your Chesterfield, MO retirement planners at Correct Capital may recommend that your investments should be left in a 401(k) account; whether that be your previous employer's or your 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 the return on investment is good, it may be your best option to keep your savings where they are. 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 penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. A 401(k) may be best if you need or want the money sooner.
- You cannot take a loan out of an IRA. While typically not advisable, if you are in a situation where you need to take out a loan from your retirement savings, it is important to note that you cannot take a loan out of an IRA.
- Your employer can put matching contributions into your 401(k) plan. Employers may contribute a full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Check out some of the other services we offer in Chesterfield, MO:
Rollover 401(k) in Chesterfield, MO | Correct Capital
At Correct Capital, we give all of our clients personalized attention and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Chesterfield, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we are legally and ethically obligated to manage your account in a way that benefits you and only you. As an independent firm, we are free to be direct and objective, and we are not bound to only offer you limited investment opportunities.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and retirement planners today.
