Rollover 401(k) in Huntleigh, MO
Rollover 401(k) in Huntleigh, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Huntleigh, MO residents have found that seeking the help of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in Huntleigh, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Huntleigh, MO
In general, you have four options when considering whether to roll over your 401(k). A knowledgeable Huntleigh, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards your preferred option. Depending on a variety of factors, it may be best 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).
The last option is not advisable unless you need money now. Your previous employer will have to take out 20% of the balance to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also withhold 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 the funds.
Another thing to note is that many employers in Huntleigh, MO require you to move the funds in your 401(k) if your account has less than $5,000 in it. Lastly, 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 Huntleigh, MO
Your Huntleigh, 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 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 difference between the cost basis and market value of shares of employer stock in your 401(k) account. If part of your 401(k) includes company stock, you can put that difference 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 0%, 15%, or 20%, depending on your income — instead of income tax, which is often higher.
The Custodian of Your Choice
When you opt to put your retirement funds 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 Opportunities
While some Huntleigh, MO companies provide 401(k) plans that include a wide array of investment opportunities, you will generally have much more flexibility in 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 change jobs frequently, it may make the most sense to merge all of your savings into one place. That will make it easier to follow the performance of your funds and you will be able to manage them more directly. Sustained long-term growth may also be more attainable.
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. 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 guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience assisting both individuals and families and business owners in Huntleigh, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate important considerations, such as how a 401(k) rollover will affect your tax planning.
Why Not to Roll Over Your 401(k) into an IRA in Huntleigh, MO
Every person's finances vary, and your Huntleigh, MO retirement planners at Correct Capital may recommend that your funds should be left in a 401(k) plan; 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 aren't too high 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.
- 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, the threshold in a 401(k) for a 10% early withdrawal fee is 55. A 401(k) may be best if you're considering early retirement.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings should only be considered in certain circumstances, you would only be able to do so if they are in a 401(k) plan.
- Your employer can put 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.
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Rollover 401(k) in Huntleigh, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Huntleigh, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to manage your account in a way that benefits you and only you. As an independent firm, we will always be direct and unbiased, and there are no limitations to the services or investment options we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) experts and financial planners today.
