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 your existing 401(k). Many Dardenne Prairie, MO residents have found that enlisting the services of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial advisors will help you get the most out of your savings. For rollover 401(k) counseling in Dardenne Prairie, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Dardenne Prairie, MO
Generally speaking, there are four ways to approach your 401(k) rollover. A qualified Dardenne Prairie, MO financial advisor like those at Correct Capital will be able to look at your financial situation and help you decide which option is best for you. Depending on a variety of factors, 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;
- Cash out your 401(k).
The last option is not recommended unless you need money now. Your previous employer would be obligated to withhold 20% of the balance for tax purposed. 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 your savings.
Another thing to note is that many companies in Dardenne Prairie, MO require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Additionally, they may be able to cash out your account if it has 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 counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. There are a variety of advantages 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 company stock in your 401(k) 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 rest of your 401(k) savings to an IRA. In doing so, you may pay long term capital gains tax on the shares — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which is often higher.
Pick Your Own Custodian
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. 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 Dardenne Prairie, MO companies 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. 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
Consolidate Your Savings Accounts
If you change jobs frequently, there are many advantages to combining all of your savings into one place. In doing so, it won't be nearly as much of a hassle to track 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 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 more than two decades of experience advising both individuals and families and business owners in Dardenne Prairie, MO with comprehensive 401(k) services. When you retain our services, we'll help you navigate special considerations, such as which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in Dardenne Prairie, MO
Each of our client's financial situation is unique, and your Dardenne Prairie, MO retirement planners at Correct Capital may advise that your investments are better off in a 401(k) account; whether that be 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 are reasonable and the return on investment is good, it may make the most sense to keep your savings where they are. If the account doesn't perform as well or you change your mind for another 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 money without a fee from either 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 a few years early.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings should only be considered in certain circumstances, it is important to know that you cannot take a loan out of an IRA.
- Your employer can put matching contributions into your 401(k) plan. Employers may contribute a full 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 Dardenne Prairie, 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 Dardenne Prairie, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience assisting Dardenne Prairie, MO individuals and families with 401(k) rollovers in addition to several other 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 will always be honest and unbiased, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and financial planners today.
