Rollover 401(k) in Frontenac, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Frontenac, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to manage your 401(k) account with your previous employer. Many Frontenac, MO residents have found that seeking the help of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Frontenac, MO, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Frontenac, MO
Typically, 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 be able to look at your financial situation and guide you towards your preferred option. Depending on a variety of factors, we may recommend 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;
- Take the cash value out of your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer will have to take out 20% of the savings in order to pay taxes on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of your savings.
Another thing to mention is that many companies in Frontenac, MO obligate you to move the funds in your 401(k) if your account has less than $5,000 in it. Furthermore, you may be required to cash out your plan if the balance is 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 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 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 difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. The advantage of this is that 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 may be substantially more.
The Custodian of Your Choice
When you opt to put your retirement funds in a 401(k), your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
A Wider Array of Investment Opportunities
While some Frontenac, MO companies provide 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
- Real estate investment trusts
Combine Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to combine all of your savings into one account. In doing so, it won't be nearly as much of a hassle to track how your investments are growing and you will be able to manage them more efficiently. You could also see greater long-term gains.
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. By rolling over the funds into an IRA, you continue adding more money over time.
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 families and business owners in Frontenac, MO with A-Z 401(k) services. When you hire Correct Capital, we'll walk you through special 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
Each of our client's financial situation is unique, and your Frontenac, MO retirement planners at Correct Capital may advise that your savings 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 rather than an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and your savings are growing as you'd like them to, there may not be a good reason to roll over your 401(k). If the account stops performing or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- No early withdrawal fees if you are 55. While you can begin taking out funds without a penalty from either 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 advisable, 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 an 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 keep contributing to your 401(k) your employer will match your contributions.
Take a look at some of the other services we offer in Frontenac, 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 Frontenac, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding Frontenac, 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 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 there are no limitations to the services or investment options we can offer you.