Rollover 401(k) in Clarkson Valley, MO
Rollover 401(k) in Clarkson Valley, MO. Moving to a new job in Clarkson Valley, MO is exciting, but it can also create confusion about the best way to manage the savings you have in your existing 401(k). Many Clarkson Valley, MO residents don't have the time, expertise, or interest to oversee 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 retirement consultants will help you get the most out of your savings. For rollover 401(k) services in Clarkson Valley, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Clarkson Valley, MO
In general, you have four options when considering whether to roll over your 401(k). A knowledgeable Clarkson Valley, 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 specific circumstances, 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;
- Take the cash value out of your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer will have to take out 20% of the savings for tax purposed. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to mention that many employers in Clarkson Valley, MO require you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Additionally, 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 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:
Pay Less in Taxes With 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 part of your 401(k) includes company stock, you can put that portion of your account into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
Pick Your Own Financial Institution
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 institution based on how secure they are and the range of services they offer.
A Wider Array of Investment Opportunities
While some Clarkson Valley, MO employers provide 401(k) plans with few limitations on your investment options, IRAs typically offer an individual investor many more options than 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 401(k) Plans
If you change jobs frequently, there are many advantages to incorporating the entirety of your retirement funds into one plan. That way, you much much more efficiently follow how your investments are growing and you will be able to manage them more directly. 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. If you roll the funds out of your old employer's plan, 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 families 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 whether a traditional or Roth IRA is best for you.
Why Not to Roll Over Your 401(k) into an IRA in Clarkson Valley, MO
Depending on your time horizon and other considerations your Clarkson Valley, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and you're getting strong returns, it may be your best option to keep your savings where they are. 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.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs allow for 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. 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 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 keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
Check out 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
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
Rollover 401(k) in Clarkson Valley, MO | Correct Capital
At Correct Capital, we give all of our clients personalized 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 nearly a century of combined experience helping Clarkson Valley, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical obligation to manage your account in a way that benefits you and only you. As an independent firm, we are free to be honest and objective, and we are not bound to only offer you limited investment options.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and retirement planners today.
