Rollover 401(k) in Eureka, MO
Rollover 401(k) in Eureka, MO. While moving to a new job can be a welcome change, it can also create confusion about the best way to handle the savings you have in your 401(k) account with your previous employer. Many Eureka, 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) experts and retirement consultants will help you understand your options. For rollover 401(k) consulting in Eureka, MO, give us a call at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Eureka, MO
Typically, there are four different things you can do with your 401(k) account with your old employer. A professional Eureka, 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;
- 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 balance to prepay the taxes you would owe 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. Cashing out could leave you with less than half of your savings.
It is important to mention that businesses in Eureka, MO are allowed to make you move the money if your account has less than $5,000 in it. Additionally, you may be required to cash out your plan if it has 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 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 current value of company stock in your 401(k) account. If part of your 401(k) includes company stock, you can transfer that difference into a standard brokerage account, and roll the remainder 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 — instead of income tax, which is often higher.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), 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 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 Eureka, MO employers offer 401(k) plans that permit a wide array 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, there are many advantages to incorporating the funds from all your accounts into one place. That will make it easier to follow how your savings are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
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 two decades of experience assisting both individuals and business owners in Eureka, MO with a variety of 401(k) services. When you meet with us, we'll help you navigate important considerations, such as what type of account makes the most sense for your time horizon.
When 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 recommend that your funds 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 over 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. the fees change in the future 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, it is important to know that you cannot take a loan out of either a Traditional or Roth IRA.
- 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 while you are still working, 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 Eureka, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Eureka, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial health, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Eureka, 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 manage your account in a way that benefits you and only you. As an independent firm, we will always be direct and objective, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) experts and financial planners today.
