Rollover 401(k) in Ladue, MO
Rollover 401(k) in Ladue, MO. Starting a new job in Ladue, MO is exciting, but it can be hard to know what to do with your existing 401(k). Many Ladue, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial advisors will help you get the most out of your savings. For rollover 401(k) advice in Ladue, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Ladue, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Ladue, MO financial advisor like those at Correct Capital will consider 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 funds 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).
Taking out the cash value is not recommended unless you need money now. Your previous employer would be required to withhold 20% of the savings to prepay the taxes you would owe on it. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Meaning, you could potentially lose more than 50% of the funds.
One last consideration to mention is that many businesses in Ladue, MO require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Additionally, 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 Ladue, MO
Your Ladue, 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. This is beneficial for several different reasons:
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 original value and current value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can transfer that portion of your account into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. This way, you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be significantly more.
Pick Your Own Custodian
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. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of institutions based on how secure they are and the range of services they offer.
More Diverse of Investment Options
While some Ladue, MO businesses provide 401(k) plans that permit a wide range of investment opportunities, 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
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you have various 401(k) plans with previous employers, it may make the most sense to incorporate the entirety of your retirement funds into one place. That way, you much much more efficiently follow how your savings are performing and you will be able to manage them more efficiently. 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. By rolling over the funds into an IRA, 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 families and business owners in Ladue, MO with numerous 401(k) services. When you hire Correct Capital, we'll walk you through important considerations, such as which type of savings plan fits best in your portfolio.
When to Avoid a 401(k) Rollover in Ladue, MO
Depending on how close you are to retirement and other factors your Ladue, MO retirement planners at Correct Capital may advise that your funds are better off in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan over an IRA include:
- 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). If the account doesn't perform as well or you change your mind for another reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, 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. Employers may contribute a full or partial match into a 401(k), while an IRA would only include the money you put into it.
Take a look at some of the other services we offer in Ladue, 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 Ladue, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting Ladue, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral obligation to act only in your best interested. As an independent firm, we will always be straightforward and unbiased, and there are no limitations to the services or investment options we can offer you.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and retirement consultants today.
