Rollover 401(k) in Fenton, MO
Rollover 401(k) in Fenton, MO. Moving to a new job in Fenton, MO is exciting, but it can also create confusion about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Fenton, MO residents don't have the time, knowledge, 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) specialists and retirement consultants will help you determine what makes the most sense for you. For rollover 401(k) advice in Fenton, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Fenton, MO
Generally speaking, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Fenton, MO financial advisor like those at Correct Capital will be able to look at your financial situation and guide you towards your preferred option. 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 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).
Cashing out is only truly an option if you need funds quickly. Your previous employer will have to withhold 20% of the savings in order to pay taxes 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. Meaning, you could lose the majority of your savings.
It is important to mention that companies in Fenton, MO are allowed to make you move the money if your plan has less than $5,000 in it. Furthermore, you may be required to cash out your plan if it has less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Fenton, MO
Your Fenton, 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. There are a variety of advantages to this strategy:
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 market value of shares of employer stock in your retirement plan. If you won shares of your previous company in your 401(k), you can put that increase in value into a standard brokerage account, and roll the other funds to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be significantly more.
Pick Your Own Financial Institution
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 stability, trading technology, and financial services.
More Diverse of Investment Options
While some Fenton, MO employers offer 401(k) plans that permit a wide array of investment opportunities, 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
Consolidate Your 401(k) Plans
If you change jobs frequently, there are many advantages to merging the entirety of your retirement funds into one place. That will make it easier to follow the growth of your funds and you will be able to manage them more efficiently. You could also see greater long-term gains.
Keep Contributing 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 more than 20 years of experience helping both individuals and business owners in Fenton, MO with numerous 401(k) services. When you meet with us, we'll help you navigate special considerations, such as how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in Fenton, MO
Depending on your time horizon and other considerations your Fenton, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) account; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan instead of an IRA include:
- If your current 401(k) plan works for you. If the fees are reasonable and the return on investment is good, there may not be a good reason to roll over your 401(k). 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 penalties if you are 55. While you can begin taking out money without a penalty from either a 401(k) or IRA at 59½, you will not have to pay 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 a few years early.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, 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.
Take a look at some of the other services we offer in Fenton, MO:
Rollover 401(k) in Fenton, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Fenton, 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 oversee your account in a way that benefits you and only you. As an independent firm, we are free to be honest and unbiased, 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 qualified 401(k) specialists and retirement consultants today.
