Rollover 401(k) in Frontenac, MO
Rollover 401(k) in Frontenac, MO. Starting a new job in Frontenac, MO is exciting, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Frontenac, 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) specialists and retirement planners will help you determine what makes the most sense for you. For rollover 401(k) consulting in Frontenac, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Frontenac, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Frontenac, MO financial advisor like those at Correct Capital will consider your financial situation and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may advise to:
- Keep your 401(k) with your old employer;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
Taking out the cash value is not advisable unless you need money now. Your previous employer would be obligated to withhold 20% of the funds for tax purposed. 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 potentially lose more than 50% of the account's value.
One last consideration to note is that employers in Frontenac, MO are allowed to make you move the money if your plan has less than $5,000 in it. Lastly, 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 Frontenac, MO
Your Frontenac, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). 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 cost basis and market value of company stock in your 401(k) plan. If part of your 401(k) includes company stock, you can transfer that difference into a standard brokerage account, and roll the other funds to an IRA. The advantage of this is that you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which is often higher.
The Financial Institution of Your Choice
In a 401(k) plan, you will not have any control over the 401(k) company that holds your funds. 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.
A Wider Range of Investment Options
While some Frontenac, MO companies offer 401(k) plans with few limitations on your 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to merging the entirety of your retirement funds into one account. In doing so, it won't be nearly as much of a hassle to follow how your savings are performing and you will be able to manage them more efficiently. It may also be the better option for long-term growth.
Continue Adding Money 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. If you roll the funds out of your old employer's plan, you will be able to supplement your savings.
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 two decades of experience helping both individuals and families and business owners in Frontenac, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate important considerations, such as what type of account makes the most sense for your time horizon.
Why Not to Roll Over Your 401(k) into an IRA in Frontenac, MO
Every person's finances vary, and your Frontenac, MO retirement planners at Correct Capital may recommend that your savings are better off in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan rather than an IRA are:
- 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, there may not be a good reason to roll over your 401(k). 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 penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you need or want the money sooner.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't recommended, it is important to know that you cannot take a loan out of an IRA.
- Your employer can pay matching contributions into your 401(k) account. 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 Frontenac, 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 Frontenac, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Frontenac, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and moral imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be honest and objective, and we are not bound to only offer you limited investment opportunities.
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 retirement planners today.
