Rollover 401(k) in Clayton, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Clayton, MO. Starting a new job in Clayton, MO can lead to new opportunities, but it can also create uncertainty about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Clayton, 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 experienced team of 401(k) specialists and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Clayton, MO, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in Clayton, MO
In general, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Clayton, MO financial advisor like those at Correct Capital will be able to look at your financial situation and guide you towards what will work best for you. Depending on a variety of factors, it may be best to:
- Leave the money 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).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the funds to prepay the taxes you would owe on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to mention that companies in Clayton, MO are allowed to make you move the money if your account has less than $5,000 in it. Furthermore, 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 Clayton, MO
Your Clayton, MO financial advisors at Correct Capital may advise 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 cost basis and market value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can transfer that increase in value into a standard brokerage account, and roll the remainder to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be substantially 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.
A Wider Array of Investment Opportunities
While some Clayton, MO businesses provide 401(k) plans that permit a wide range of investment opportunities, IRAs typically offer an individual investor many more options than 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
Consolidate Your Savings Accounts
If you have multiple 401(k) plans with previous employers, there are many advantages to combining the entirety of your retirement funds into one plan. That will make it easier to follow how your savings are growing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Continue Adding Money to Your Accounts
While you will still see return on your investments in you old 401(k) plan, you will no longer be able to contribute more savings to it. If you roll the funds out of your old employer's plan, 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 20 years of experience assisting both individuals and business owners in Clayton, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate special considerations, such as how a 401(k) rollover will affect your tax planning.
When Not to Roll Over Your 401(k) into an IRA in Clayton, MO
Every person's finances vary, and your Clayton, MO retirement planners at Correct Capital may advise that your investments 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 include:
- 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 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.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out money without a penalty from both a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. A 401(k) may be best if you're considering early retirement.
- Loans from an IRA are not allowed. While taking a loan from retirement savings should only be considered in certain circumstances, 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 keep contributing to your 401(k) your employer will match your contributions.
See some of the other services we offer in Clayton, MO:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
Rollover 401(k) in Clayton, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and tailor 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 seven decades of combined experience assisting Clayton, 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 do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be direct and unbiased, and we are not bound to only offer you limited investment options.