Rollover 401(k) in Oakland, MO
Rollover 401(k) in Oakland, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with your 401(k) account with your previous employer. Many Oakland, 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 experienced team of 401(k) experts and financial planners will help you get the most out of your savings. For rollover 401(k) services in Oakland, MO, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Oakland, MO
Typically, there are four different things you can do with your 401(k) plan with your old employer. A professional Oakland, MO financial advisor like those at Correct Capital will consider your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on a variety of factors, we may recommend 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;
- Cash out your 401(k).
Taking out the cash value is only truly an option if you need funds quickly. Your previous employer would be obligated to withhold 20% of the balance in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
One last consideration to mention is that many companies in Oakland, 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. Furthermore, they may be able to cash out your account if it has less than $1,000.
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 increase in value between the cost basis and current value of shares of employer stock in your 401(k) plan. 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 remainder to an IRA. In doing so, 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.
The Financial Institution of Your Choice
When you opt to put your retirement funds in a 401(k), your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
More of Investment Opportunities
While some Oakland, MO companies provide 401(k) plans with few limitations on your investment options, most retirement planners find that IRAs offer more control and flexibility than employer-limited 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
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to combining the entirety of your retirement funds into one place. In doing so, it won't be nearly as much of a hassle to follow how your savings are growing and you will be able to manage them more efficiently. You could also see greater long-term gains.
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 may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over two decades of experience helping both individuals and business owners in Oakland, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll guide you through special considerations, such as what type of account makes the most sense for your time horizon.
When Not to Roll Over Your 401(k) into an IRA in Oakland, MO
Each of our client's financial situation is unique, and your Oakland, MO retirement planners at Correct Capital may advise that your investments should be left in a 401(k) plan; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan rather than an IRA are:
- If your current 401(k) plan works for you. If the fees are fair and the return on investment is good, it may be your best option 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 you can begin taking out savings without a fee from both a 401(k) or IRA at 59½, you will not face a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. A 401(k) may be best if you need or want the money sooner.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't recommended, it is important to note that you cannot take a loan out of either a Traditional or Roth IRA.
- 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 while you are still working, it may make more sense to keep contributing to your 401(k) your employer will match your contributions.
Check out some of the other services we offer in Oakland, MO:
- Succession Planning
- Fiduciary Financial Advisor
- 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
Rollover 401(k) in Oakland, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and tailor 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 75 years of combined experience aiding Oakland, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral obligation to manage your account in a way that benefits you and only you. As an independent firm, we will always be straightforward and unbiased, and there are no limitations to the services or investment opportunities we can recommend.
Give us a call today at 314-930-401K or contact us online to schedule an appointment with one of our professional 401(k) specialists and retirement consultants today.
