Rollover 401(k) in Cottleville, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Cottleville, MO. Moving to a new job in Cottleville, MO can lead to new opportunities, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Cottleville, MO residents don't have the time, expertise, 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 get the most out of your savings. For rollover 401(k) counseling in Cottleville, MO, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in Cottleville, MO
In general, there are four ways to approach your 401(k) rollover. A experienced Cottleville, MO financial advisor like those at Correct Capital will consider your finances and help you determine which option is best for you. Depending on your current financial health and your time horizon, we may advise 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;
- Cash out your 401(k).
Cashing out should only be considered if you need funds quickly. Your previous employer would be required to take out 20% of the savings for tax purposed. 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 potentially lose more than 50% of your savings.
One last consideration to note is that many companies in Cottleville, MO require you to roll over the funds to an IRA or new 401(k) if your plan has less than $5,000 in it. Additionally, you may be required to cash out your plan if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Cottleville, MO
Your Cottleville, 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 difference 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 difference into a standard brokerage account, and roll the other funds to an IRA. This way, 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 significantly more.
The Financial Institution of Your Choice
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
More of Investment Opportunities
While some Cottleville, MO companies offer 401(k) plans with few limitations on your investment opportunities, you will generally have much more control over an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Combine Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to combine the entirety of your retirement funds into one place. That will make it easier to track how your investments are growing and managing them will be more streamlined. You could also see greater long-term gains.
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 continue adding more money over time.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience helping both individuals and business owners in Cottleville, MO with comprehensive 401(k) services. When you retain our services, we'll guide you through important considerations, such as required minimum distribution model makes the most sense for you.
When Not to Roll Over Your 401(k) into an IRA in Cottleville, MO
Depending on how close you are to retirement and other considerations your Cottleville, MO retirement planners at Correct Capital may advise that your investments are best kept 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 over an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and you're getting strong returns, it may be your best option to keep your savings where they are. If the account doesn't perform as well 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 a few years early.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't advisable, it is important to know 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 full or partial match into a 401(k), while an IRA would only include the money you put into it.
See some of the other services we offer in Cottleville, MO:
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
- Retirement Planning
Rollover 401(k) in Cottleville, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding Cottleville, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral imperative 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 there are no limitations to the services or investment options we can recommend.