Rollover 401(k) in O'Fallon, MO
Rollover 401(k) in O'Fallon, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many O'Fallon, MO residents have found that seeking the help of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and retirement planners will help you get the most out of your savings. For rollover 401(k) counseling in O'Fallon, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in O'Fallon, MO
In general, there are four different things you can do with your 401(k) plan with your old employer. A experienced O'Fallon, MO financial advisor like those at Correct Capital will analyze your financial situation and guide you towards what will work best for you. Depending on your specific circumstances, we may advise 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).
Taking out the cash value is only truly an option if you need funds quickly. Your previous employer will have to withhold 20% of the balance in order to pay taxes on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to mention that companies in O'Fallon, MO are allowed to make you move the money if your account has less than $5,000 in it. Lastly, 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, MO
Your O'Fallon, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). 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 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 other funds to an IRA. By separating your 401(k) into two accounts, 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 significantly more.
The Custodian of Your Choice
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 how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some O'Fallon, MO employers offer 401(k) plans that include a wide range of investment options, 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
Combine Your Savings Accounts
If you change jobs frequently, there are many advantages to merging the entirety of your retirement funds into one place. In doing so, it won't be nearly as much of a hassle to track the performance of your funds and you will be able to manage them more efficiently. It may also be the better option for long-term growth.
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. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over 20 years of experience advising both individuals and families and business owners in O'Fallon, MO with numerous 401(k) services. When you retain our services, we'll guide you through important considerations, such as how a 401(k) rollover will affect your tax planning.
Why to Avoid a 401(k) Rollover in O'Fallon, MO
Each of our client's financial situation is unique, and your O'Fallon, MO retirement planners at Correct Capital may advise that your savings are best kept 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 rather than an IRA are:
- If your current 401(k) plan works for you. If the fees aren't exorbitant and your savings are growing as you'd like them to, there may not be a good 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 can still roll over your 401(k) at any time.
- Avoid early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- Loans from an IRA are not allowed. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, it is important to mention that you cannot take a loan out of an 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 stick with a 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, MO:
- 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, MO | Correct Capital
At Correct Capital, we give all of our clients personalized 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 over 75 years of combined experience helping O'Fallon, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be honest 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 knowledgeable 401(k) specialists and retirement planners today.
