Rollover 401(k) in Kirkwood, MO
Rollover 401(k) in Kirkwood, MO. While moving to a new job can be a welcome change, it can also lead to uncertainty about the best way to manage the savings you have in your existing 401(k). Many Kirkwood, 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 dedicated team of 401(k) experts and financial planners will help you determine what makes the most sense for you. 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
Generally speaking, there are four ways to approach your 401(k) rollover. A knowledgeable Kirkwood, MO financial advisor like those at Correct Capital will consider your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on your specific circumstances, it may be best to:
- Leave the savings 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;
- Take the cash value out of your 401(k).
Cashing out is not recommended unless you need money now. Your previous employer would be obligated to withhold 20% of the funds for tax purposed. 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.
Another thing to note is that many businesses in Kirkwood, MO require 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 it has 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 benefits 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 difference between the cost basis and current value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can put that increase in value into a standard brokerage account, and roll the remainder to an IRA. In doing so, you may pay long term capital gains tax on the shares — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which may be substantially more.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your money. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
More of Investment Opportunities
While some Kirkwood, MO employers offer 401(k) plans that include a wide array of investment options, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, 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, there are many advantages to combining the entirety of your retirement funds into one account. That will make it easier to follow how your investments are growing and you will be able to manage them more directly. It may also be the better option for long-term growth.
Keep Contributing to Your Accounts
While you will still see return on your investments 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 guide you in your decision of what to do during a 401(k) rollover. We have more than two decades of experience helping both individuals and business owners in Kirkwood, MO with a variety of 401(k) services. When you retain our services, we'll help you navigate special considerations, such as whether a traditional or Roth IRA is best for you.
Why Not to Roll Over Your 401(k) into an IRA in Kirkwood, MO
Depending on your time horizon and other factors your Kirkwood, MO retirement planners at Correct Capital may advise that your funds are better off 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 are reasonable and your savings are growing as you'd like them to, there may not be a great 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.
- Avoid early withdrawal fees if you are 55. While you can begin taking out money without a fee from either a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- 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. 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 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 Kirkwood, 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
- Social Security Consultants Near Me
Rollover 401(k) in Kirkwood, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor our services and advice to their current financial health, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades 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 bound to act only in your best interested. As an independent firm, we will always be direct and objective, and there are no limitations to the services or investment opportunities 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 knowledgeable 401(k) experts and retirement planners today.
