Rollover 401(k) in Crestwood, MO
Rollover 401(k) in Crestwood, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to manage your existing 401(k). Many Crestwood, MO residents don't have the time, expertise, or interest to manage multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Crestwood, MO, reach out to us today at 314-930-401K or contact us online.
What You Can Do With Your Rollover 401(k) in Crestwood, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A experienced Crestwood, MO financial advisor like those at Correct Capital will analyze 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, it may be best to:
- Keep your 401(k) with your old employer;
- 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).
The last option 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. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than 50% of the funds.
Another thing to note is that many businesses in Crestwood, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Furthermore, you may be required to cash out your plan if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Crestwood, MO
Your Crestwood, 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. 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 account. If you won shares of your previous company in your 401(k), you can transfer that portion of your account into a standard brokerage account, and roll the other funds to an IRA. The advantage of this is that 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 is often higher.
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 and the range of services they offer.
More Diverse of Investment Opportunities
While some Crestwood, MO employers provide 401(k) plans with few limitations on your investment opportunities, most retirement planners find that IRAs offer more control and flexibility than employer-limited 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 401(k) Plans
If you have various 401(k) plans with previous employers, it may make the most sense to incorporate the entirety of your retirement funds into one place. In doing so, it won't be nearly as much of a hassle to follow how your investments are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
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. By rolling over the funds into an IRA, 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 over two decades of experience helping both individuals and families and business owners in Crestwood, MO with a variety of 401(k) services. When you meet with us, we'll walk you through special considerations, for instance how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in Crestwood, MO
Each of our client's financial situation is unique, and your Crestwood, MO retirement planners at Correct Capital may recommend that your funds are better off in a 401(k) plan; either your previous employer's or your new one. Some reasons to choose a 401(k) plan instead of an IRA include:
- If you like the benefits of your current 401(k) plan. 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.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 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 isn't recommended, 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 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 Crestwood, MO:
- Succession Planning
- Fiduciary Financial Advisor
- 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
Rollover 401(k) in Crestwood, 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 over seven decades of combined experience helping Crestwood, MO individuals and families with 401(k) rollovers as part of our comprehensive 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 honest and objective, and we are not bound to only offer you limited investment options.
Give us a call today at 314-930-401K or contact us online to schedule an appointment with one of our experienced 401(k) specialists and financial advisors today.
