Rollover 401(k) in Cottleville, MO
Rollover 401(k) in Cottleville, MO. Moving to a new job in Cottleville, 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 Cottleville, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and retirement consultants will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Cottleville, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Cottleville, MO
In general, there are four ways to approach your 401(k) rollover. A qualified Cottleville, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on your specific circumstances, it may be best to:
- Leave the savings 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).
Taking out the cash value is not recommended unless you need money now. Your previous employer will have to take out 20% of the balance in order to pay taxes on it. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
One last consideration to mention is that many businesses 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. Lastly, they may be able to cash out your account if it has 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). There are a variety of benefits to this strategy:
Take Advantage of 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 shares of employer stock in your 401(k) account. 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. 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 considerably more.
Pick Your Own Financial Institution
When you opt to put your retirement funds in a 401(k), you will not have any control over the 401(k) company that holds your money. By rolling over to an 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.
A Wider Range of Investment Opportunities
While some Cottleville, MO employers offer 401(k) plans with few limitations on your investment options, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. 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, it may make the most sense to merge the entirety of your retirement funds into one account. That will make it easier to follow 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 may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have over two decades of experience helping both individuals and families and business owners in Cottleville, MO with A-Z 401(k) services. When you hire Correct Capital, we'll walk you through special considerations, such as whether a traditional or Roth IRA is best for you.
Why Not to Roll Over Your 401(k) into an IRA in Cottleville, MO
Every person's finances vary, and your Cottleville, MO retirement planners at Correct Capital may advise that your investments are better off in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. If the fees are reasonable and your savings are growing as you'd like them to, there may not be a great reason to roll over your 401(k). If the account stops giving you strong returns or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal fees if you are 55. While you can begin taking out money without a fee 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 need or want the money sooner.
- Loans from an IRA are not allowed. While typically not recommended, 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. 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 stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
Click on the links below to see some of the other services we offer in Cottleville, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Cottleville, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience helping Cottleville, MO individuals and families with 401(k) rollovers along with a host of 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 honest and objective, and there are no limitations to the services or investment opportunities we can offer you.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and financial advisors today.
