Rollover 401(k) in O'Fallon, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
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 your 401(k) account with your previous employer. Many O'Fallon, MO residents don't have the time, knowledge, or interest to oversee 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 retirement consultants will help you understand your options. For rollover 401(k) consulting in O'Fallon, MO, reach out to us today at 314-930-401K 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 professional O'Fallon, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on a variety of factors, we may advise to:
- Keep your 401(k) with your old employer;
- Roll over your 401(k) to a plan with your new employer;
- 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 not advisable unless you need money now. Your previous employer would be obligated to take out 20% of the savings for tax purposed. 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 funds.
It is important to note that businesses in O'Fallon, MO are allowed to make you move the money 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, MO
Your O'Fallon, 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. 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 original value and current value of company stock in your retirement account. If you won shares of your previous company in your 401(k), you can put that increase in value into a standard brokerage account, and roll the remainder to an IRA. The advantage of this is that 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 substantially more.
The Financial Institution of Your Choice
When you opt to put your savings in a 401(k), the money will be held by the 401(k) company your employer chooses. When you do a 401(k) rollover to a Traditional or Roth 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.
A Wider Array of Investment Options
While some O'Fallon, MO businesses provide 401(k) plans with few limitations on your 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:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Combine Your 401(k) Plans
If you change jobs frequently, there are many advantages to combining the funds from all your accounts into one place. In doing so, it won't be nearly as much of a hassle to follow the growth of your funds and you will be able to manage them more directly. You could also see greater long-term gains.
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. 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 guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience helping both individuals and business owners in O'Fallon, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll walk you through important considerations, for instance which type of savings plan fits best in your portfolio.
When to Avoid a 401(k) Rollover in O'Fallon, MO
Every person's finances vary, and your O'Fallon, MO retirement planners at Correct Capital may advise that your savings should be left in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan rather than 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, it may make the most sense 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 penalties if you are 55. While both 401(k)s and IRAs allow for 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. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't advisable, 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) your employer will match your contributions.
Check out some of the other services we offer in O'Fallon, MO:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
Rollover 401(k) in O'Fallon, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial status, 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 as part of our comprehensive wealth management services. As fiduciary advisors, we are legally and ethically obligated to manage your account in a way that benefits you and only you. As an independent firm, we are free to be honest and objective, and there are no limitations to the services or investment opportunities we can offer you.