Rollover 401(k) in Edwardsville, IL
Rollover 401(k) in Edwardsville, IL. Starting a new job in Edwardsville, IL can lead to new opportunities, but it can also lead to confusion about the best way to handle your 401(k) account with your previous employer. Many Edwardsville, IL residents don't have the time, knowledge, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in Edwardsville, IL, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Edwardsville, IL
In general, there are four ways to approach your 401(k) rollover. A professional Edwardsville, IL financial advisor like those at Correct Capital will analyze your finances and help you decide which option is best for you. Depending on your specific circumstances, 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;
- Cash out your 401(k).
Taking out the cash value is not advisable unless you need money now. Your previous employer would be required to withhold 20% of the balance for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. That means you might not even see 50% of the account's value.
It is important to note that businesses in Edwardsville, IL are allowed to make you move the money if your plan has less than $5,000 in it. Furthermore, 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 Edwardsville, IL
Your Edwardsville, IL 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:
Pay Less in Taxes With 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 retirement plan. If part of your 401(k) includes company stock, 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. This way, you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be significantly more.
The Custodian of Your Choice
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
More of Investment Opportunities
While some Edwardsville, IL companies provide 401(k) plans that permit a wide range of investment opportunities, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. 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 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to combining the funds from all your accounts into one plan. That way, you much much more efficiently follow the performance of your funds 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 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 determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience helping both individuals and families and business owners in Edwardsville, IL with numerous 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.
Why to Avoid a 401(k) Rollover in Edwardsville, IL
Each of our client's financial situation is unique, and your Edwardsville, IL retirement planners at Correct Capital may advise that your investments are best kept in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to stick with a 401(k) plan over 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. 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.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you need or want the money sooner.
- 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 pay matching contributions into your 401(k) plan. Employers may contribute a full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Click on the links below to see some of the other services we offer in Edwardsville, IL:
- 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 Edwardsville, IL | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their objectives. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding Edwardsville, IL individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be honest and unbiased, and there are no limitations 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) experts and financial advisors today.
