Rollover 401(k) in Edwardsville, IL
Rollover 401(k) in Edwardsville, IL. While moving to a new job can be a welcome change, it can also create uncertainty about the best way to manage your existing 401(k). Many Edwardsville, IL 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 advisors will help you determine what makes the most sense for you. For rollover 401(k) services in Edwardsville, IL, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Edwardsville, IL
Generally speaking, there are four ways to approach your 401(k) rollover. A qualified Edwardsville, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards what will work 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 advisable unless you need money now. Your previous employer will have 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 withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. That means you might not even see half of your savings.
One last consideration to mention is that companies in Edwardsville, IL are allowed to make you move the money if your account has less than $5,000 in it. Additionally, they may be able to cash out your account if it has less than $1,000.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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Benefits to Rolling Over a 401(k) into an IRA in Edwardsville, IL
Your Edwardsville, IL 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 increase in value between the original value and market value of shares of employer stock in your retirement plan. 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. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which is often higher.
The Financial Institution 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 custodian based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Opportunities
While some Edwardsville, IL employers offer 401(k) plans with few limitations on your investment options, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have various 401(k) plans with previous employers, it could be incredibly helpful to incorporate the funds from all your accounts into one place. That will make it easier to follow how your savings are growing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
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 over 20 years of experience helping both individuals and business owners in Edwardsville, IL with a variety of 401(k) services. When you retain our services, we'll walk you through special considerations, such as which type of savings plan fits best in your portfolio.
When 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 savings 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 your current 401(k) plan works for you. 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. You are not required to roll over a 401(k) immediately, so you are free to change your mind and transfer the funds at a later date.
- 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, 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 advisable, if you are in a situation where you need to take out a loan from your retirement savings, it is important to mention that you cannot take a loan out of an IRA.
- 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 while you are still working, it may make more sense to stick with a 401(k) your employer will match your contributions.
Check out 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
Rollover 401(k) in Edwardsville, IL | Correct Capital
At Correct Capital, we give all of our clients personalized 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 nearly a century of combined experience assisting Edwardsville, IL 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 act only in your best interested. As an independent firm, we will always be straightforward and objective, and there are no limitations to the services or investment opportunities we can recommend.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and retirement consultants today.
