Rollover 401(k) in Chesterfield, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Chesterfield, MO. Starting a new job in Chesterfield, MO is exciting, but it can also create uncertainty about the best way to manage your 401(k) account with your previous employer. Many Chesterfield, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) services in Chesterfield, MO, reach out to us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Chesterfield, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A experienced Chesterfield, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards what will work best for you. Depending on a variety of factors, we may recommend 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).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer would be obligated to withhold 20% of the funds in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of the funds.
It is important to note that many companies in Chesterfield, MO require you to move the funds in your 401(k) if your account has less than $5,000 in it. Furthermore, 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 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 difference between the original value and current value of company stock in your retirement plan. 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 other funds to an IRA. This way, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — rather than income tax, which may be substantially more.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on how secure they are, the ease of their digital platforms, and the other services they offer.
More Diverse of Investment Options
While some Chesterfield, MO companies provide 401(k) plans that include a wide array of 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:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Combine Your Savings Accounts
If you have various 401(k) plans with previous employers, it may make the most sense to merge the entirety of your retirement funds into one account. In doing so, it won't be nearly as much of a hassle to follow the growth of your funds and managing them will be more streamlined. You could also see greater long-term gains.
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. 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 two decades of experience assisting both individuals and families and business owners in Chesterfield, MO with a variety of 401(k) services. When you meet with us, we'll guide you through important considerations, for instance which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in Chesterfield, MO
Depending on your time horizon and other considerations your Chesterfield, MO retirement planners at Correct Capital may advise that your funds should be left in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan over an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are fair and your savings are growing as you'd like them to, it may be advisable 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.
- No early withdrawal fees if you are 55. While you can begin taking out money without a fee from either a 401(k) or IRA at 59½, you will not face 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 need or want the money sooner.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, it is important to note that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
See some of the other services we offer in Chesterfield, 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
- Retirement Calculator
Rollover 401(k) in Chesterfield, 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 over seven decades of combined experience assisting Chesterfield, MO individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we are legally and ethically bound to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be direct and unbiased, and there are no restrictions to the services or investment options we can offer you.