Rollover 401(k) in Frontenac, MO
Rollover 401(k) in Frontenac, MO. Starting a new job in Frontenac, MO can lead to new opportunities, 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 oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in Frontenac, MO, call us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Frontenac, MO
In general, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Frontenac, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards your preferred option. Depending on your current financial health and your time horizon, it may be best to:
- Leave the funds in your former employer's 401(k) plan;
- Roll over your 401(k) to a plan with your new employer;
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
The last option is not advisable unless you need money now. Your previous employer will have to withhold 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 potentially lose more than 50% of the funds.
It is important to note that many businesses in Frontenac, MO require you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Furthermore, they may be able to cash out your account 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 suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits to this strategy:
Take Advantage of 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) account. If you won shares of your previous company in your 401(k), you can transfer 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 your company stock — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
The Custodian of Your Choice
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 be able to choose your preferred custodian based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some Frontenac, MO companies provide 401(k) plans with few limitations on your investment opportunities, you will generally have much more control over an IRA than you would in a 401(k) plan. In an IRA, you can invest in any number of assets, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have multiple 401(k) plans with previous employers, there are many advantages to merging the entirety of your retirement funds into one place. That will make it easier to track how your savings 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 may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have over two decades of experience advising both individuals and business owners in Frontenac, MO with a variety of 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, such as which type of savings plan fits best in your portfolio.
When Not to Roll Over Your 401(k) into an IRA in Frontenac, MO
Depending on your time horizon and other considerations your Frontenac, MO retirement planners at Correct Capital may advise that your savings are best kept in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan rather than an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are fair and you're getting strong returns, it may be your best option to keep your savings where they are. the fees change in the future 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 both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. A 401(k) may be best if you're considering early retirement.
- 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, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. Employers may contribute a full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
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 reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience aiding Frontenac, MO 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 direct and unbiased, and we are not bound to only offer you limited investment opportunities.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and financial advisors today.
