Rollover 401(k) in Creve Coeur, MO
Rollover 401(k) in Creve Coeur, MO. Starting a new job in Creve Coeur, MO can lead to new opportunities, but it can also lead to confusion about the best way to manage your 401(k) account with your previous employer. Many Creve Coeur, MO residents have found that seeking the help of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you determine what makes the most sense for you. For rollover 401(k) advice in Creve Coeur, MO, reach out to us today 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 analyze your financial situation and help you determine 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).
Cashing out is not advisable unless you need money now. Your previous employer would be required to take out 20% of the funds to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to note that many employers in Creve Coeur, MO obligate you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Additionally, they may be able to cash out your account 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 advise 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 original value and market value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can transfer that increase in value into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. In doing so, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
Pick Your Own Financial Institution
When you opt to put your retirement funds in a 401(k), 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 have your pick of institutions based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Options
While some Creve Coeur, MO companies provide 401(k) plans that include a wide range of 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
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you change jobs frequently, it could be incredibly helpful to combine the entirety of your retirement funds into one account. That will make it easier to track 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 you will still see return on your investments 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 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 over two decades of experience advising both individuals and business owners in Creve Coeur, MO with A-Z 401(k) services. When you retain our services, we'll walk you through special considerations, such as whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Creve Coeur, MO
Every person's finances vary, and your Creve Coeur, MO retirement planners at Correct Capital may advise that your investments should be left 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 rather than an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are reasonable and your savings are growing as you'd like them to, it may be advisable to keep your savings where they are. If the account doesn't perform as well 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 penalties if you are 55. While you can begin taking out savings without a fee from both a 401(k) or IRA at 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. So, a 401(k) may be preferable if you would like to retire earlier.
- 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, 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 before retirement, it may make more sense to keep contributing to your 401(k) your employer will match your contributions.
Take a look at 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
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
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 achieve 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 in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral imperative to manage your account in a way that benefits you and only you. As an independent firm, we will always be straightforward and objective, and we are not bound to only offer you limited investment options.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) experts and retirement planners today.
