Rollover 401(k) in Creve Coeur, MO
Rollover 401(k) in Creve Coeur, MO. While moving to a new job can be a welcome change, it can also lead to confusion about the best way to handle your existing 401(k). Many Creve Coeur, MO residents have found that seeking the help of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) services in Creve Coeur, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Creve Coeur, MO
In general, there are four ways to approach your 401(k) rollover. A experienced Creve Coeur, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards what will work best for you. Depending on your specific circumstances, it may be best to:
- Leave the money 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;
- Take the cash value out of your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer would be required to take out 20% of the funds in order to pay taxes 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. Meaning, you could lose the majority of the funds.
It is important to note that many companies in Creve Coeur, 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, 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 Creve Coeur, MO
Your Creve Coeur, 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 shares of employer stock in your 401(k) 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. 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.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of custodians based on how secure they are and the range of services they offer.
More Diverse of Investment Options
While some Creve Coeur, MO businesses provide 401(k) plans that include a wide array of investment options, 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
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to incorporating the entirety of your retirement funds into one plan. 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. 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. 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 over two decades of experience assisting both individuals and business owners in Creve Coeur, MO with a variety of 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance whether a traditional or Roth IRA is best for you.
Why Not to Roll Over Your 401(k) into an IRA in Creve Coeur, MO
Every person's finances vary, and your Creve Coeur, MO retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan instead of an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and your savings are growing as you'd like them to, 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.
- No early withdrawal penalties 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. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, 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 dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Click on the links below to see some of the other services we offer in Creve Coeur, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in Creve Coeur, 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 nearly a century of combined experience helping Creve Coeur, 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 obligation to act only in your best interested. As an independent firm, we are free to be straightforward and unbiased, and there are no restrictions to the services or investment options we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and retirement consultants today.
