Rollover 401(k) in Clarkson Valley, MO
Rollover 401(k) in Clarkson Valley, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with your existing 401(k). Many Clarkson Valley, MO residents have found that seeking the help of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Clarkson Valley, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Clarkson Valley, MO
Typically, there are four ways to approach your 401(k) rollover. A knowledgeable Clarkson Valley, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may advise to:
- Keep your 401(k) with your old employer;
- 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).
The last option is not advisable unless you need money now. Your previous employer will have to take out 20% of the savings to prepay the taxes you would owe 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 funds.
It is important to note that companies in Clarkson Valley, MO are allowed to make you move the money if your account has less than $5,000 in it. Additionally, they may be able to cash out your account if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Clarkson Valley, MO
Your Clarkson Valley, 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 cost basis and market value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can put that increase in value into a standard brokerage account, and roll the other funds to an IRA. By separating your 401(k) into two accounts, 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 may be significantly more.
The Custodian of Your Choice
When you opt to put your savings in a 401(k), the money will be held by the 401(k) company your employer chooses. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of institutions based on how secure they are and the range of services they offer.
More of Investment Opportunities
While some Clarkson Valley, MO businesses provide 401(k) plans that include a wide array of investment opportunities, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, it may make the most sense to incorporate the funds from all your accounts into one plan. That way, you much much more efficiently track how your investments are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Keep Contributing 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. By rolling over the funds into an IRA, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have more than two decades of experience advising both individuals and business owners in Clarkson Valley, MO with numerous 401(k) services. When you meet with us, we'll guide you through important considerations, for instance how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in Clarkson Valley, MO
Every person's finances vary, and your Clarkson Valley, MO retirement planners at Correct Capital may advise that your savings are best kept in a 401(k) plan; either your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and the return on investment is good, there may not be a great reason to roll over your 401(k). the fees change in the future or you change your mind for another reason, you can still roll over your 401(k) at any time.
- 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. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. 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 mention that you cannot take a loan out of an IRA.
- Your employer can pay matching contributions into your 401(k) account. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Click on the links below to see some of the other services we offer in Clarkson Valley, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in Clarkson Valley, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience helping Clarkson Valley, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we are free to be straightforward and unbiased, and we are not bound to only offer you limited investment opportunities.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and retirement planners today.
