Rollover 401(k) in Glendale, MO
Rollover 401(k) in Glendale, MO. Moving to a new job in Glendale, MO is exciting, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Glendale, MO residents don't have the time, financial literacy, 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 financial advisors will help you get the most out of your savings. For rollover 401(k) counseling in Glendale, MO, reach out to us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Glendale, MO
Generally speaking, there are four ways to approach your 401(k) rollover. A experienced Glendale, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards what will work best for you. Depending on your current financial health and your time horizon, it may be best to:
- Leave the money 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;
- Cash out 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 balance 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 the account's value.
One last consideration to note is that many companies in Glendale, MO require you to roll over the funds to an IRA or new 401(k) if your plan has less than $5,000 in it. Lastly, 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 Glendale, MO
Your Glendale, MO financial advisors at Correct Capital may recommend 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 difference between the original value 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 have your pick of institutions based on how secure they are and the range of services they offer.
A Wider Range of Investment Options
While some Glendale, MO businesses provide 401(k) plans that include a wide array of 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
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it may make the most sense to merge all of your savings into one plan. That way, you much much more efficiently track how your investments are growing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
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 more than two decades of experience advising both individuals and business owners in Glendale, MO with numerous 401(k) services. When you retain our services, we'll walk you through special considerations, for instance required minimum distribution model makes the most sense for you.
When Not to Roll Over Your 401(k) into an IRA in Glendale, MO
Each of our client's financial situation is unique, and your Glendale, MO retirement planners at Correct Capital may advise that your investments are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are fair and the return on investment is good, there may not be a great 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.
- Avoid early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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 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 note that you cannot take a loan out of either a Traditional or Roth 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 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 Glendale, 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 Glendale, 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 helping Glendale, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically required to manage your account in a way that benefits you and only you. As an independent firm, we will always 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 knowledgeable 401(k) specialists and retirement planners today.
