Rollover 401(k) in Kirkwood, MO
Rollover 401(k) in Kirkwood, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your 401(k) account with your previous employer. Many Kirkwood, 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 experienced team of 401(k) specialists and financial advisors will help you understand your options. For rollover 401(k) advice in Kirkwood, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Kirkwood, MO
In general, there are four different things you can do with your 401(k) plan with your old employer. A experienced Kirkwood, 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 your current financial health and your time horizon, 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;
- Cash out your 401(k).
Cashing out is only truly an option if you need funds quickly. Your previous employer would be obligated to withhold 20% of the balance in order to pay taxes on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. That means you might not even see 50% of the funds.
One last consideration to note is that businesses in Kirkwood, MO are allowed to make you move the money if your plan 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 Kirkwood, MO
Your Kirkwood, 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:
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 original value and market value of company stock in your retirement account. If you won shares of your previous company in your 401(k), you can put that increase in value 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 the shares — which is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
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 be able to choose your preferred institution based on how secure they are and the range of services they offer.
A Wider Range of Investment Options
While some Kirkwood, MO employers provide 401(k) plans that include a wide array of investment options, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to combine the funds from all your accounts into one plan. That way, you much much more efficiently follow the growth of your funds 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 continue adding more money over time.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience advising both individuals and families and business owners in Kirkwood, MO with numerous 401(k) services. When you retain our services, we'll guide you through special considerations, such as whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Kirkwood, MO
Every person's finances vary, and your Kirkwood, MO retirement planners at Correct Capital may recommend that your investments should be left in a 401(k) account; either 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 include:
- If your current 401(k) plan works for you. If the fees are fair and you're getting strong returns, there may not be a good reason to roll over your 401(k). If the account doesn't perform as well or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While you can begin taking out savings 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. A 401(k) may be best if you're considering early retirement.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, it is important to know 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 while you are still working, it may make more sense to keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
Click on the links below to see some of the other services we offer in Kirkwood, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Kirkwood, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding Kirkwood, MO individuals and families with 401(k) rollovers in addition to several 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 will always be honest and objective, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and financial planners today.
