Rollover 401(k) in Dardenne Prairie, MO
Rollover 401(k) in Dardenne Prairie, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many Dardenne Prairie, 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 experienced team of 401(k) specialists and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Dardenne Prairie, MO, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in Dardenne Prairie, MO
In general, there are four ways to approach your 401(k) rollover. A qualified Dardenne Prairie, MO financial advisor like those at Correct Capital will analyze your financial situation and help you decide which option is best for you. Depending on a variety of factors, 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 only truly an option if you need funds quickly. Your previous employer would be required to withhold 20% of the savings to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also take 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.
It is important to mention that many employers in Dardenne Prairie, MO require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Lastly, 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 Dardenne Prairie, MO
Your Dardenne Prairie, MO financial advisors at Correct Capital may recommend 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 original value and market value of shares of employer stock in your retirement 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 other funds to an IRA. This way, 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.
The Custodian of Your Choice
When you opt to put your savings in a 401(k), your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll be able to choose your preferred institution based on stability, trading technology, and financial services.
More of Investment Options
While some Dardenne Prairie, MO employers offer 401(k) plans that permit a wide array of investment opportunities, 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you change jobs frequently, it could be incredibly helpful to incorporate the funds from all your accounts into one plan. That will make it easier to track how your savings are performing and you will be able to manage them more efficiently. Sustained long-term growth may also be more attainable.
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. If you roll the funds out of your old employer's plan, you will be able to supplement your savings.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over 20 years of experience helping both individuals and families and business owners in Dardenne Prairie, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate special considerations, such as what type of account makes the most sense for your time horizon.
When Not to Roll Over Your 401(k) into an IRA in Dardenne Prairie, MO
Each of our client's financial situation is unique, and your Dardenne Prairie, MO retirement planners at Correct Capital may recommend that your funds should be left in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to choose 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 too high 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 can still roll over your 401(k) at any time.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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 should only be considered in certain circumstances, you would only be able to do so if they are in a 401(k) plan.
- Your employer can put matching contributions into your 401(k) account. 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) to receive an employer match and keep your retirement assets in one place.
Take a look at some of the other services we offer in Dardenne Prairie, 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 Dardenne Prairie, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience aiding Dardenne Prairie, 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 bound to act only in your best interested. As an independent firm, we are free to be straightforward and objective, and we are not bound to only offer you limited investment opportunities.
Give us a call today at 314-930-401K or contact us online to schedule an appointment with one of our knowledgeable 401(k) specialists and financial planners today.
