Rollover 401(k) in Madison County, IL

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Rollover 401(k) in Madison County, IL. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many Madison County, IL residents don't have the time, financial literacy, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering 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) services in Madison County, IL, call us today at 877-930-4015 or contact us online.


Rollover 401(k) Options in Madison County, IL

Generally speaking, there are four different things you can do with your 401(k) account with your old employer. A qualified Madison County, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on a variety of factors, we may advise to:

  1. Keep your 401(k) with your old employer;
  2. Roll over your 401(k) to a plan with your new employer;
  3. Roll over your 401(k) into a Traditional IRA or Roth IRA;
  4. Take the cash value out of your 401(k).

Taking out the cash value should only be considered if you need funds quickly. Your previous employer would be required 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 also have to pay federal, state, and local taxes. Meaning, you could lose the majority of your savings.

Another thing to mention is that businesses in Madison County, IL are allowed to make you move the money if your plan has less than $5,000 in it. Additionally, they may be able to cash out your account if it has less than $1,000.


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Benefits to Rolling Over a 401(k) into an IRA in Madison County, IL

Your Madison County, IL 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 portion of your account 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 usually 15% but can go up to 20% for people with high-income — instead of income tax, which may be substantially more.


The Financial Institution of Your Choice

In a 401(k) plan, 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 be able to choose your preferred institution based on how secure they are and the range of services they offer.


More Diverse of Investment Options

While some Madison County, IL 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. IRAs typically allow investment in almost any type of asset, including:

  • Shares
  • Bonds
  • Certificates of deposit
  • Mutual funds
  • ETFs
  • Real estate investment trusts
  • Annuities

Combine Your Savings Accounts

If you change jobs frequently, it may make the most sense to incorporate the entirety of your retirement funds into one account. That will make it easier to track how your investments are performing and managing them will be more streamlined. You could also see greater long-term gains.


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. 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 help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over 20 years of experience helping both individuals and business owners in Madison County, IL with comprehensive 401(k) services. When you meet with us, 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 Madison County, IL

Every person's finances vary, and your Madison County, IL retirement planners at Correct Capital may recommend that your funds are best kept in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan over an IRA are:

  • If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and the return on investment is good, it may be advisable to keep your savings where they are. If the account stops performing or you change your mind for another reason, you can still roll over your 401(k) at any time.
  • No early withdrawal fees if you are 55. While you can begin taking out money without a fee from both 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 earlier.
  • Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, you would only be able to do so if they are in a 401(k) plan.
  • Your employer can pay 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.

See some of the other services we offer in Madison County, IL:

Rollover 401(k) Madison County, IL | 401(k) Management | Financial Advisors | Retirement Planning Near Madison County

Rollover 401(k) in Madison County, IL | Correct Capital

At Correct Capital, we treat each client individually and get to know them so we can help them reach their goals. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Madison County, IL 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 oversee your account in a way that benefits you and only you. As an independent firm, we are free to be direct 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 experienced 401(k) experts and financial advisors today.

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