Rollover 401(k) in Clayton, MO
Rollover 401(k) in Clayton, MO. Starting a new job in Clayton, MO is exciting, but it can be hard to know what to do with your 401(k) account with your previous employer. Many Clayton, MO residents don't have the time, knowledge, or interest to manage multiple retirement accounts or to understand the best way to approach 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, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Clayton, MO
Generally speaking, there are four different things you can do with your 401(k) plan with your old employer. A qualified Clayton, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and help you decide which option is best for you. Depending on your current financial health and your time horizon, we may advise to:
- Leave the money 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;
- Take the cash value out of your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer would be obligated 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 potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to mention that employers in Clayton, MO are allowed to make you move the money if your account has less than $5,000 in it. Lastly, you may be required to cash out your plan if it has less than $1,000.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Benefits to Rolling Over a 401(k) into an IRA in Clayton, MO
Your Clayton, MO financial advisors at Correct Capital may counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. There are a variety of advantages to this strategy:
Pay Less in Taxes With 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 put that difference into a standard brokerage account, and roll the remainder to an IRA. In doing so, you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be considerably more.
The Custodian of Your Choice
In a 401(k) plan, 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 Clayton, MO businesses provide 401(k) plans that permit a wide range 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
Combine Your 401(k) Plans
If you have multiple 401(k) plans with previous employers, there are many advantages to incorporating all of your savings into one place. That way, you much much more efficiently follow the growth of your funds and you will be able to manage them more efficiently. Sustained long-term growth may also be more attainable.
Keep Contributing 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. By rolling over the funds into an IRA, you will be able to supplement your savings.
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 advising both individuals and business owners in Clayton, MO with comprehensive 401(k) services. When you retain our services, we'll help you navigate important considerations, for instance how a 401(k) rollover will affect your tax planning.
Why 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 better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan rather than an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and you're getting strong returns, there may not be a good reason to roll over your 401(k). the fees change in the future or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- No 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 a few years early.
- 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, you would only be able to do so if they are in a 401(k) plan.
- 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.
Click on the links below to see some of the other services we offer in Clayton, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in Clayton, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor our services and advice to their current financial health, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience helping Clayton, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically obligated to act only in your best interested. As an independent firm, we are free to be direct and unbiased, and there are no limitations to the services or investment opportunities we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and financial planners today.
