Rollover 401(k) in Ellisville, MO
Rollover 401(k) in Ellisville, MO. While moving to a new job can be a welcome change, it can also create confusion about the best way to handle your 401(k) account with your previous employer. Many Ellisville, MO residents don't have the time, expertise, or interest to manage multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial planners will help you understand your options. For rollover 401(k) advice in Ellisville, MO, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Ellisville, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A knowledgeable Ellisville, MO financial advisor like those at Correct Capital will analyze your financial situation and guide you towards your preferred option. 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).
The last option is not recommended unless you need money now. Your previous employer will have to take out 20% of the savings in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
One last consideration to note is that businesses in Ellisville, MO are allowed to make you move the money 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 Ellisville, MO
Your Ellisville, 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 difference 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 put that difference 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 — instead of income tax, which may be significantly more.
The Financial Institution of Your Choice
In a 401(k) plan, 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 be able to choose your preferred custodian based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Ellisville, MO employers provide 401(k) plans that permit a wide range of investment options, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have various 401(k) plans with previous employers, there are many advantages to merging the funds from all your accounts into one account. That way, you much much more efficiently follow the performance of your funds and you will be able to manage them more efficiently. 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 help you decide if a 401(k) rollover is the best option for you. We have more than two decades of experience assisting both individuals and business owners in Ellisville, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate important considerations, such as whether a traditional or Roth IRA is best for you.
When Not to Roll Over Your 401(k) into an IRA in Ellisville, MO
Every person's finances vary, and your Ellisville, 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 rather than 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, there may not be a great reason to roll over your 401(k). If the account stops performing or you change your mind for another 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 allow for withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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, 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 stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
Check out some of the other services we offer in Ellisville, 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 Ellisville, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and tailor 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 helping Ellisville, 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 obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and unbiased, and there are no limitations to the services or investment opportunities we can recommend.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and financial planners today.
