Rollover 401(k) in Manchester, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Manchester, MO. Starting a new job in Manchester, MO can lead to new opportunities, but it can also lead to confusion about the best way to handle your 401(k) account with your previous employer. Many Manchester, MO residents don't have the time, expertise, or interest to manage 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 planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Manchester, MO, reach out to us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Manchester, MO
In general, there are four ways to approach your 401(k) rollover. A professional Manchester, MO financial advisor like those at Correct Capital will analyze 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 recommend to:
- Leave the savings in your former employer's 401(k) plan;
- Roll over your 401(k) to a plan with your new employer;
- 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 advisable unless you need money now. Your previous employer would be required to withhold 20% of the funds to prepay the taxes you would owe on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to note that many employers in Manchester, MO require you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Lastly, 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 Manchester, MO
Your Manchester, 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 current value of company stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can put that portion of your account into a standard brokerage account, and roll the other funds to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be considerably more.
Pick Your Own Custodian
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 custodian based on how secure they are, the ease of their digital platforms, and the other services they offer.
More Diverse of Investment Options
While some Manchester, MO businesses provide 401(k) plans that include a wide range of investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to combine the funds from all your accounts into one account. That way, you much much more efficiently track the growth of your funds 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 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 more than 20 years of experience helping both individuals and families and business owners in Manchester, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance required minimum distribution model makes the most sense for you.
When Not to Roll Over Your 401(k) into an IRA in Manchester, MO
Depending on how close you are to retirement and other factors your Manchester, MO retirement planners at Correct Capital may recommend that your savings are best kept in a 401(k) account; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan instead of an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and the return on investment is good, it may be advisable to keep your savings where they are. You are not required to roll over a 401(k) immediately, so you are free to change your mind and transfer the funds at a later date.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not face a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. So, a 401(k) may be preferable if you would like to retire earlier.
- 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 can put matching contributions into your 401(k) plan. 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) your employer will match your contributions.
Click on the links below to see some of the other services we offer in Manchester, 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 Manchester, 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 helping Manchester, 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 are free to be direct and objective, and we are not bound to only offer you limited investment opportunities.