Rollover 401(k) in Concord, MO
Rollover 401(k) in Concord, MO. Starting a new job in Concord, MO can lead to new opportunities, but it can also lead to uncertainty about the best way to handle your existing 401(k). Many Concord, 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 dedicated team of 401(k) experts and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) services in Concord, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Concord, MO
Generally speaking, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Concord, MO financial advisor like those at Correct Capital will analyze your financial situation and guide you towards your preferred option. 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 your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer will have to withhold 20% of the balance to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. That means you might not even see half of your savings.
One last consideration to mention is that many companies in Concord, MO require you to move the funds in your 401(k) if your account has less than $5,000 in it. Lastly, they may be able to cash out your account if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Concord, MO
Your Concord, MO financial advisors at Correct Capital may recommend rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 cost basis and current value of company stock in your retirement account. If part of your 401(k) includes company stock, you can transfer that portion of your account 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 caps out at 20% for the highest earners — instead of income tax, which is often higher.
The Custodian of Your Choice
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Concord, MO companies offer 401(k) plans that permit a wide range of 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
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it could be incredibly helpful to incorporate all of your savings into one place. In doing so, it won't be nearly as much of a hassle to track how your savings are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Continue Adding Money 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. 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 advising both individuals and families and business owners in Concord, MO with numerous 401(k) services. When you meet with us, we'll help you navigate important considerations, for instance whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Concord, MO
Each of our client's financial situation is unique, and your Concord, MO retirement planners at Correct Capital may advise that your savings should be left in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees aren't exorbitant and the return on investment is good, there may not be a good reason to roll over your 401(k). 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 fees if you are 55. While you can begin taking out savings without a penalty from either a 401(k) or IRA at 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 know that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer can put matching contributions into your 401(k) plan. Employers may contribute a full 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 Concord, MO:
Rollover 401(k) in Concord, 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 nearly a century of combined experience helping Concord, MO individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to act only in your best interested. As an independent firm, we will always be honest and objective, and there are no limitations to the services or investment opportunities we can recommend.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and financial planners today.
