Rollover 401(k) in Richmond Heights, MO
Rollover 401(k) in Richmond Heights, MO. Moving to a new job in Richmond Heights, MO is exciting, but it can be hard to know what to do with your 401(k) account with your previous employer. Many Richmond Heights, MO residents have found that enlisting the services of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement consultants will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in Richmond Heights, MO, give us a call at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Richmond Heights, MO
Typically, there are four ways to approach your 401(k) rollover. A knowledgeable Richmond Heights, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on a variety of factors, it may be best to:
- Leave the money in your former employer's 401(k) plan;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to take out 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 potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of your savings.
One last consideration to note is that companies in Richmond Heights, MO are allowed to make you move the money if your account has less than $5,000 in it. Lastly, 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 Richmond Heights, MO
Your Richmond Heights, 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 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) plan. 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 other funds to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which is often higher.
The Custodian of Your Choice
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of institutions based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some Richmond Heights, MO companies provide 401(k) plans that allow for a wide range of investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, 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, it could be incredibly helpful to merge the entirety of your retirement funds into one account. That will make it easier 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 you will still see return on your investments 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 guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience advising both individuals and families and business owners in Richmond Heights, MO with comprehensive 401(k) services. When you meet with us, we'll help you navigate important considerations, for instance how a 401(k) rollover will affect your tax planning.
Why to Avoid a 401(k) Rollover in Richmond Heights, MO
Each of our client's financial situation is unique, and your Richmond Heights, MO retirement planners at Correct Capital may recommend that your funds are best kept in a 401(k) account; either your previous employer's or your new one. Some reasons to stick with a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees aren't too high and the return on investment is good, there may not be a good reason to roll over your 401(k). If the account stops giving you strong returns or you change your mind for another reason, you can still roll over your 401(k) at any time.
- Avoid 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 need or want the money sooner.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- 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 while you are still working, it may make more sense to keep contributing to your 401(k) your employer will match your contributions.
Take a look at some of the other services we offer in Richmond Heights, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in Richmond Heights, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Richmond Heights, MO individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we have a legal and moral imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and unbiased, and we are not bound to only offer you limited investment opportunities.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and retirement planners today.
