Rollover 401(k) in Fairview Heights, IL
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Fairview Heights, IL. Moving to a new job in Fairview Heights, IL is exciting, but it can also create uncertainty about the best way to handle the savings you have in your 401(k) account with your previous employer. Many Fairview Heights, IL residents don't have the time, financial literacy, or interest to manage multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you determine what makes the most sense for you. For rollover 401(k) services in Fairview Heights, IL, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in Fairview Heights, IL
Generally speaking, there are four ways to approach your 401(k) rollover. A experienced Fairview Heights, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on your specific circumstances, it may be best to:
- Leave the savings 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).
The last option is only truly an option if you need funds quickly. Your previous employer will have to withhold 20% of the balance 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. Meaning, you could lose the majority of your savings.
It is important to note that companies in Fairview Heights, IL are allowed to make you move the money if your account has less than $5,000 in it. Additionally, they may be able to cash out your account if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Fairview Heights, IL
Your Fairview Heights, IL financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). 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 cost basis and current value of company stock in your 401(k) plan. 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 remainder to an IRA. The advantage of this is that 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 is often higher.
The Custodian 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 have your pick of institutions based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Options
While some Fairview Heights, IL businesses offer 401(k) plans with few limitations on your investment opportunities, you will generally have much more flexibility in 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
- Real estate investment trusts
Consolidate Your 401(k) Plans
If you change jobs frequently, it may make the most sense to incorporate all of your savings into one account. That way, you much much more efficiently track the performance of your funds and managing them will be more streamlined. You could also see greater long-term gains.
Continue Adding Money to Your Accounts
While you will still see return on your investments 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 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 business owners in Fairview Heights, IL with comprehensive 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, such as how a 401(k) rollover will affect your tax planning.
Why Not to Roll Over Your 401(k) into an IRA in Fairview Heights, IL
Every person's finances vary, and your Fairview Heights, IL retirement planners at Correct Capital may advise that your investments are better off in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan rather than an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees are fair and your savings are growing as you'd like them to, there may not be a good reason to roll over your 401(k). the fees change in the future or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out savings without a penalty from either a 401(k) or IRA at 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.
- Loans from an IRA are not allowed. 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 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 Fairview Heights, IL:
- 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
- Retirement Calculator
- Retirement Planning
Rollover 401(k) in Fairview Heights, IL | Correct Capital
At Correct Capital, we give all of our clients personalized 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 over 75 years of combined experience helping Fairview Heights, IL individuals and families with 401(k) rollovers along with many 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 unbiased, and there are no restrictions to the services or investment options we can recommend.