Rollover 401(k) in Eureka, MO
Rollover 401(k) in Eureka, MO. While moving to a new job can be a welcome new opportunity, it can also create confusion about the best way to handle your 401(k) account with your previous employer. Many Eureka, MO residents have found that seeking the help of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) services in Eureka, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Eureka, MO
Typically, there are four ways to approach your 401(k) rollover. A experienced Eureka, MO financial advisor like those at Correct Capital will consider your financial situation and help you determine which option is best for you. Depending on a variety of factors, it may be best to:
- Leave the savings 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;
- Take the cash value out of your 401(k).
Taking out the cash value is not advisable unless you need money now. Your previous employer will have to withhold 20% of the funds to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also take 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.
Another thing to mention is that companies in Eureka, MO are allowed to make you move the money if your plan has less than $5,000 in it. Additionally, you may be required to cash out your plan if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Eureka, MO
Your Eureka, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 shares of employer stock in your retirement account. If you won shares of your previous company in your 401(k), you can put 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 caps out at 20% for the highest earners — rather than income tax, which may be substantially 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. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Eureka, MO businesses offer 401(k) plans that include a wide array of investment opportunities, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to merge all of your savings into one place. That will make it easier to track how your investments are growing and managing them will be more streamlined. You could also see greater long-term gains.
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. 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 determine 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 Eureka, MO with numerous 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance what type of account makes the most sense for your time horizon.
Why Not to Roll Over Your 401(k) into an IRA in Eureka, MO
Each of our client's financial situation is unique, and your Eureka, MO retirement planners at Correct Capital may advise that your savings should be left in a 401(k) account; either 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 are fair and your savings are growing as you'd like them to, 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 fees 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. 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 either a Traditional or Roth IRA.
- Your employer can pay matching contributions into your 401(k) plan. 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 keep contributing to your 401(k) your employer will match your contributions.
Click on the links below to see some of the other services we offer in Eureka, 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
Rollover 401(k) in Eureka, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor 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 Eureka, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically obligated to act only in your best interested. As an independent firm, we are free to be straightforward and objective, and we are not bound to only offer you limited investment options.
Reach out to us 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.
