Rollover 401(k) in Ellisville, MO
Rollover 401(k) in Ellisville, MO. Starting a new job in Ellisville, MO is exciting, but it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many Ellisville, 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 dedicated team of 401(k) specialists and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Ellisville, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Ellisville, MO
In general, there are four ways to approach your 401(k) rollover. A knowledgeable Ellisville, MO 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, we may recommend 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).
The last option should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the funds in order to pay taxes on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. That means you might not even see 50% of the funds.
It is important to note that companies in Ellisville, MO 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 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 Ellisville, MO
Your Ellisville, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). 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 cost basis and current value of company stock in your retirement 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 remainder 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 — rather than income tax, which may be considerably more.
Pick Your Own Custodian
When you opt to put your retirement funds in a 401(k), your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of institutions based on how secure they are and the range of services they offer.
A Wider Range of Investment Opportunities
While some Ellisville, MO companies provide 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it could be incredibly helpful to combine the entirety of your retirement funds into one place. That will make it easier to track how your investments are performing and managing them will be more streamlined. You could also see greater long-term gains.
Continue Adding Money 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. By rolling over the funds into an IRA, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over 20 years of experience advising both individuals and families and business owners in Ellisville, MO with a variety of 401(k) services. When you meet with us, we'll guide you through important considerations, for instance whether a traditional or Roth IRA is best for you.
Why to Avoid a 401(k) Rollover in Ellisville, MO
Every person's finances vary, and your Ellisville, MO retirement planners at Correct Capital may advise that your funds are better off in a 401(k) plan; either your an old plan or rolling them over into a 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 aren't too high and the return on investment is good, 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 allow for withdrawals when you are 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. A 401(k) may be best if you're considering early retirement.
- You cannot take a loan out of an IRA. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. 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.
Click on the links below to see 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
Rollover 401(k) in Ellisville, MO | Correct Capital
At Correct Capital, we give all of our clients personalized guidance 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 helping Ellisville, 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 direct and unbiased, and we are not bound to only offer you limited investment opportunities.
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 retirement planners today.
