Rollover 401(k) in Lemay, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Lemay, MO. Starting a new job in Lemay, MO can lead to new opportunities, but it can also create confusion about the best way to manage your 401(k) account with your previous employer. Many Lemay, MO residents don't have the time, expertise, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and retirement consultants will help you understand your options. For rollover 401(k) services in Lemay, MO, reach out to us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Lemay, MO
Generally speaking, there are four ways to approach your 401(k) rollover. A professional Lemay, MO financial advisor like those at Correct Capital will consider your finances and guide you towards your preferred option. Depending on your specific circumstances, 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 should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the savings for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than half of the funds.
One last consideration to note is that many companies in Lemay, MO require you to move the funds in your 401(k) if your account has less than $5,000 in it. Additionally, 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 Lemay, MO
Your Lemay, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). 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 difference between the cost basis and current value of shares of employer stock in your retirement plan. If part of your 401(k) includes company stock, you can put that difference into a standard brokerage account, and roll the remainder to an IRA. In doing so, 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.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Opportunities
While some Lemay, MO businesses offer 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:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it could be incredibly helpful to combine all of your savings 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 decide if a 401(k) rollover is the best option for you. We have over 20 years of experience helping both individuals and business owners in Lemay, 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 Lemay, MO
Every person's finances vary, and your Lemay, MO retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) plan; either your previous employer's or your new one. Some reasons to stick with a 401(k) plan instead of an IRA include:
- 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, it may make the most sense to keep your savings where they are. 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 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'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) plan. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Check out some of the other services we offer in Lemay, MO:
- 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
- Retirement Calculator
- Retirement Planning
Rollover 401(k) in Lemay, 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 Lemay, 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 act only in your best interested. As an independent firm, we will always be honest and objective, and we are not bound to only offer you limited investment options.