Rollover 401(k) in O'Fallon, IL

Rollover 401(k) in O'Fallon, ILProfessional, Honest, and Experienced Retirement Planners and Financial Advisors

Rollover 401(k) in O'Fallon, IL. 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 O'Fallon, IL residents don't have the time, financial literacy, or interest to oversee multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and retirement consultants will help you understand your options. For rollover 401(k) counseling in O'Fallon, IL, give us a call at 314-930-401K or contact us online.


How You Can Approach Your Rollover 401(k) in O'Fallon, IL

In general, you have four options when considering whether to roll over your 401(k). A qualified O'Fallon, IL financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on your specific circumstances, it may be best to:

  1. Keep your 401(k) with your old employer;
  2. Roll over your 401(k) to your new employer's 401(k);
  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 is only truly an option 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 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 many companies in O'Fallon, IL require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Additionally, you may be required to cash out your plan if it has less than $1,000.



Benefits to Rolling Over a 401(k) into an IRA in O'Fallon, IL

Your O'Fallon, 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 advantages to this strategy:


Pay Less in Taxes With 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 company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can transfer that portion of your account into a standard brokerage account, and roll the remainder to an IRA. This way, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — rather than income tax, which may be significantly more.


Pick Your Own Financial Institution

In a 401(k) plan, your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.


A Wider Array of Investment Options

While some O'Fallon, IL employers provide 401(k) plans that include a wide range of investment opportunities, 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:

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

Consolidate Your 401(k) Plans

If you change jobs frequently, it could be incredibly helpful to incorporate all of your savings into one account. That will make it easier to follow how your investments are growing and managing them will be more streamlined. 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 over 20 years of experience assisting both individuals and families and business owners in O'Fallon, IL with numerous 401(k) services. When you hire Correct Capital, we'll walk you through special considerations, such as required minimum distribution model makes the most sense for you.

Why to Avoid a 401(k) Rollover in O'Fallon, IL

Every person's finances vary, and your O'Fallon, IL retirement planners at Correct Capital may advise that your funds should be left in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan instead of an IRA include:

  • If you like the benefits of your current 401(k) plan. If the fees are fair and the return on investment is good, it may make the most sense to keep your savings where they are. the fees change in the future 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 both 401(k)s and IRAs allow for withdrawals when you are 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.
  • 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 full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.

Click on the links below to see some of the other services we offer in O'Fallon, IL:

Rollover 401(k) O'Fallon, IL | 401(k) Management | Financial Advisors | Retirement Planning Near O'Fallon

Rollover 401(k) in O'Fallon, IL | Correct Capital

At Correct Capital, we treat each client individually and get to know them so we can help them reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience helping O'Fallon, IL individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we are free to be honest and objective, and we are not bound to only offer you limited investment opportunities.

Reach out to us today at 314-930-401K or contact us online to schedule an appointment with one of our qualified 401(k) experts and financial planners today.

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