Rollover 401(k) in O'Fallon, IL
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 existing 401(k). Many O'Fallon, IL residents don't have the time, knowledge, or interest to manage multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial planners will help you get the most out of your savings. For rollover 401(k) advice in O'Fallon, IL, reach out to us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in O'Fallon, IL
In general, there are four different things you can do with your 401(k) account with your old employer. A professional O'Fallon, IL financial advisor like those at Correct Capital will consider your finances and help you decide which option is best for you. Depending on your specific circumstances, we may recommend 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).
Taking out the cash value is not advisable unless you need money now. Your previous employer will have to withhold 20% of the savings in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, 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.
One last consideration to mention is that companies in O'Fallon, IL are allowed to make you move the money if your plan 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 O'Fallon, IL
Your O'Fallon, IL financial advisors at Correct Capital may advise 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 difference between the cost basis and market value of company 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 your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, 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 how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Options
While some O'Fallon, IL companies provide 401(k) plans with few limitations on your investment options, 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 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to incorporating all of your savings into one account. That will make it easier to track how your investments are growing and you will be able to manage them more directly. Sustained long-term growth may also be more attainable.
Continue Adding Money 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 continue adding more money over time.
The financial advisors of Correct Capital will help you determine 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 O'Fallon, IL with A-Z 401(k) services. When you meet with us, we'll help you navigate important considerations, such as required minimum distribution model makes the most sense for you.
When Not to Roll Over Your 401(k) into an IRA in O'Fallon, IL
Depending on how close you are to retirement and other considerations your O'Fallon, IL retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) account; either your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan over an IRA include:
- 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, 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 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, a 401(k) does not include a 10% early withdrawal fee if you are 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 should only be considered in certain circumstances, it is important to note that you cannot take a loan out of an IRA.
- Your employer can pay matching contributions into your 401(k) plan. 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 stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
Click on the links below to see 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
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
Rollover 401(k) in O'Fallon, IL | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance 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 nearly a century of combined experience aiding O'Fallon, IL individuals and families with 401(k) rollovers in addition to several 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 will always be direct and objective, and there are no limitations to the services or investment options we can recommend.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and financial planners today.
