Rollover 401(k) in Crestwood, MO
Rollover 401(k) in Crestwood, MO. Starting a new job in Crestwood, MO is exciting, but it can also lead to confusion about the best way to handle the savings you have in 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) specialists and retirement planners will help you understand your options. For rollover 401(k) consulting in Crestwood, MO, call us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Crestwood, MO
Typically, there are four different things you can do with your 401(k) plan with your old employer. A qualified Crestwood, MO financial advisor like those at Correct Capital will be able to look at your finances and help you determine which option is best for you. Depending on a variety of factors, it may be best to:
- Leave the funds 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).
The last option is only truly an option if you need funds quickly. Your previous employer would be obligated to take out 20% of the funds in order to pay taxes 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. Meaning, you could lose the majority of your savings.
Another thing to note is that many companies in Crestwood, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Lastly, 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 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 increase in value between the original value and market value of shares of employer stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can transfer that increase in value into a standard brokerage account, and roll the remainder to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which is often higher.
The Financial Institution of Your Choice
When you opt to put your retirement funds in a 401(k), the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are and the range of services they offer.
A Wider Range of Investment Opportunities
While some Crestwood, MO businesses offer 401(k) plans that permit a wide range of investment opportunities, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have various 401(k) plans with previous employers, there are many advantages to combining the funds from all your accounts into one account. That will make it easier to follow the growth of your funds and you will be able to manage them more efficiently. It may also be the better option for long-term growth.
Keep Contributing to Your Accounts
While you can still reap the benefits of the investments and savings that are already there, you won't be able to add funds to a 401(k) plan with your previous employer. 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 guide you in your decision of what to do during a 401(k) rollover. We have more than two decades of experience assisting both individuals and families and business owners in Crestwood, MO with numerous 401(k) services. When you hire Correct Capital, we'll guide you through important 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 Crestwood, MO
Depending on your time horizon and other considerations your Crestwood, MO retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) account; whether that be your previous employer's or your 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 aren't too high and your savings are growing as you'd like them to, it may be your best option to keep your savings where they are. the fees change in the future or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While you can begin taking out funds 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. 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 may match your 401(k) contributions. While some employers will allow you to roll money out of your 401(k) to an IRA while you are still working, it may make more sense to stick with a 401(k) your employer will match your contributions.
Check out 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
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 reach their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Crestwood, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we are legally and ethically bound to oversee your account in a way that benefits you and only you. As an independent firm, we are free to be straightforward and unbiased, and we are not bound to only offer you limited investment options.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) specialists and retirement consultants today.
