Rollover 401(k) in Eureka, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Eureka, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Eureka, MO residents don't have the time, financial literacy, or interest to oversee 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 advisors will help you get the most out of your savings. For rollover 401(k) counseling in Eureka, MO, call us today at 314-930-401K or contact us online.
What You Can Do With 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 assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on a variety of factors, 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;
- Take the cash value out of your 401(k).
Taking out the cash value is only truly an option if you need funds quickly. Your previous employer would be obligated to withhold 20% of the funds for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. Cashing out could leave you with less than 50% of the account's value.
One last consideration to mention is that many employers in Eureka, MO obligate you to roll over the funds to an IRA or new 401(k) if your plan 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 difference between the cost basis and market value of shares of employer stock in your 401(k) plan. 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 other funds 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 is often higher.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Options
While some Eureka, MO employers offer 401(k) plans with few limitations on your investment options, you will generally have much more control over an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Consolidate Your Savings Accounts
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 way, you much much more efficiently 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 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 guide you in your decision of what to do during a 401(k) rollover. We have more than two decades of experience advising both individuals and business owners in Eureka, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll walk you through special considerations, for instance how a 401(k) rollover will affect your tax planning.
Why Not to Roll Over Your 401(k) into an IRA in Eureka, MO
Every person's finances vary, and your Eureka, MO retirement planners at Correct Capital may recommend that your investments should be left in a 401(k) account; whether that be your previous employer's or your new one. Some reasons to stick with a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. 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. 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 you can begin taking out money without a penalty from both a 401(k) or IRA at 59½, you will not face 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 recommended, if you are in a situation where you need to take out a loan from your retirement savings, it is important to note 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 before retirement, it may make more sense to stick with a 401(k) your employer will match your contributions.
See some of the other services we offer in Eureka, MO:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
Rollover 401(k) in Eureka, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding 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 honest and unbiased, and we are not bound to only offer you limited investment opportunities.