Rollover 401(k) in Millstadt, IL
Rollover 401(k) in Millstadt, 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 existing 401(k). Many Millstadt, IL residents have found that enlisting the services of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced 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 Millstadt, IL, reach out to us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Millstadt, IL
Typically, there are four different things you can do with your 401(k) plan with your old employer. A experienced Millstadt, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan 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:
- Keep your 401(k) with your old employer;
- 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).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to take out 20% of the balance for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of the funds.
It is important to note that companies in Millstadt, IL are allowed to make you move the money if your plan has less than $5,000 in it. Lastly, you may be required to cash out your plan if it has less than $1,000.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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Benefits to Rolling Over a 401(k) into an IRA in Millstadt, IL
Your Millstadt, IL financial advisors at Correct Capital may recommend rolling over your 401(k) into an Individual Retirement Account (IRA). 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 increase in value between the original value and current value of company 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 other funds to an IRA. In doing so, 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 is often higher.
Pick Your Own Financial Institution
In a 401(k) plan, the money will be held by the 401(k) company your employer chooses. By rolling over to an 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 Opportunities
While some Millstadt, IL companies provide 401(k) plans with few limitations on your 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, there are many advantages to combining all of your savings into one place. That way, you much much more efficiently track how your savings are growing and you will be able to manage them more efficiently. It may also be the better option for long-term growth.
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 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 assisting both individuals and families and business owners in Millstadt, IL with numerous 401(k) services. When you retain our services, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in Millstadt, IL
Each of our client's financial situation is unique, and your Millstadt, IL retirement planners at Correct Capital may recommend that your funds are best kept in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to stick with a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees aren't too high and the return on investment is good, it may be your best option 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. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While typically not advisable, 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. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Click on the links below to see some of the other services we offer in Millstadt, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in Millstadt, IL | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Millstadt, IL individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we are legally and ethically required to manage 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 opportunities.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and retirement planners today.
