Rollover 401(k) in O'Fallon, IL
Rollover 401(k) in O'Fallon, IL. Starting a new job in O'Fallon, IL is exciting, but it can be hard to know what to do with the savings you have in your existing 401(k). Many O'Fallon, IL residents have found that enlisting the services of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in O'Fallon, IL, call us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in O'Fallon, IL
Generally speaking, 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 finances and guide you towards your preferred option. Depending on your specific circumstances, 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).
Cashing out should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the funds for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. That means you might not even see half of the account's value.
Another thing to mention is that many businesses in O'Fallon, IL require you to roll over the funds to an IRA or new 401(k) if your plan has less than $5,000 in it. Additionally, they may be able to cash out your account if the balance is 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 recommend rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 increase in value between the original value and market 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 difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. In doing so, you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — instead of income tax, which may be considerably 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 institutions based on stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some O'Fallon, IL companies offer 401(k) plans that allow for a wide array of investment opportunities, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, 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 combine the entirety of your retirement funds into one account. In doing so, it won't be nearly as much of a hassle to follow how your savings are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Keep Contributing to Your Accounts
While your money will still grow in you old 401(k) plan, you will no longer be able to contribute more savings to it. If you roll the funds out of your old employer's plan, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience helping both individuals and business owners in O'Fallon, IL with comprehensive 401(k) services. When you meet with us, we'll walk you through special considerations, such as how a 401(k) rollover will affect your tax planning.
Why Not to Roll Over Your 401(k) into an IRA in O'Fallon, IL
Every person's finances vary, and your O'Fallon, IL retirement planners at Correct Capital may advise that your funds are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to stick with 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 exorbitant and the return on investment is good, there may not be a great reason to roll over your 401(k). If the account doesn't perform as well or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, you will not have to pay 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're considering early retirement.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't recommended, it is important to know 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 before retirement, it may make more sense to keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
Take a look at some of the other services we offer in O'Fallon, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in O'Fallon, IL | Correct Capital
At Correct Capital, we give all of our clients personalized attention 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 nearly a century 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 are legally and ethically bound to act only in your best interested. As an independent firm, we will always be straightforward and unbiased, and we are not bound to only offer you limited investment opportunities.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and financial planners today.
