Rollover 401(k) in Oakland, MO
Rollover 401(k) in Oakland, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your existing 401(k). Many Oakland, MO residents have found that seeking the help of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you get the most out of your savings. For rollover 401(k) advice in Oakland, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Oakland, MO
Generally speaking, there are four different things you can do with your 401(k) account with your old employer. A qualified Oakland, MO financial advisor like those at Correct Capital will consider your financial situation and help you decide which option is best for you. Depending on your current financial health and your time horizon, it may be best 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;
- Cash out your 401(k).
The last option should only be considered if you need funds quickly. Your previous employer will have to take out 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 lose the majority of your savings.
One last consideration to note is that many companies in Oakland, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Lastly, they may be able to cash out your account if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Oakland, MO
Your Oakland, 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 cost basis 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 increase in value 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 your company stock — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which may be significantly more.
Pick Your Own Financial Institution
When you opt to put your savings 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 be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More Diverse of Investment Opportunities
While some Oakland, MO companies offer 401(k) plans with few limitations on your 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 several 401(k) plans spread across multiple former employers, it may make the most sense to merge all of your savings into one plan. That will make it easier to follow how your investments are performing and you will be able to manage them more efficiently. Sustained long-term growth may also be more attainable.
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. 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 understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have more than 20 years of experience helping both individuals and business owners in Oakland, MO with A-Z 401(k) services. When you hire Correct Capital, we'll guide you through important considerations, for instance whether a traditional or Roth IRA is best for you.
Why to Avoid a 401(k) Rollover in Oakland, MO
Every person's finances vary, and your Oakland, MO retirement planners at Correct Capital may advise that your funds should be left in a 401(k) plan; either your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan rather than an IRA are:
- 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 make the most sense 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.
- Avoid early withdrawal fees if you are 55. While you can begin taking out money without a penalty from both a 401(k) or IRA at 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 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. While some employers will allow you to roll money out of your 401(k) to an IRA before retirement, it may make more sense to stick with a 401(k) your employer will match your contributions.
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Rollover 401(k) in Oakland, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Oakland, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we are legally and ethically obligated to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be direct and unbiased, and we are not bound to only offer you limited investment options.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and financial advisors today.
