Rollover 401(k) in Richmond Heights, MO
Rollover 401(k) in Richmond Heights, MO. Starting a new job in Richmond Heights, MO is exciting, but it can also lead to confusion about the best way to manage your 401(k) account with your previous employer. Many Richmond Heights, MO residents don't have the time, knowledge, or interest to manage multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial advisors 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
Generally speaking, you have four options when considering whether to roll over your 401(k). A experienced Richmond Heights, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on a variety of factors, we may advise to:
- Leave the funds 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;
- Take the cash value out of your 401(k).
Taking out the cash value is not recommended unless you need money now. Your previous employer will have 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. Cashing out could leave you with less than half of the account's value.
One last consideration to note is that many businesses in Richmond Heights, MO obligate you to move the funds in your 401(k) if your account has less than $5,000 in it. Lastly, 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 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. This is beneficial for several different reasons:
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 current value of company stock in your retirement plan. If part of your 401(k) includes company stock, 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 is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your money. 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 and the range of services they offer.
More of Investment Opportunities
While some Richmond Heights, MO businesses offer 401(k) plans with few limitations on your investment options, most retirement planners find that IRAs offer more control and flexibility than employer-limited 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
Combine Your Savings Accounts
If you have various 401(k) plans with previous employers, it could be incredibly helpful to incorporate the entirety of your retirement funds into one plan. That way, you much much more efficiently track how your investments are growing and you will be able to manage them more directly. You could also see greater long-term gains.
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. By rolling over the funds into an IRA, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over 20 years of experience helping both individuals and families and business owners in Richmond Heights, MO with comprehensive 401(k) services. When you retain our services, we'll walk you through special considerations, for instance how a 401(k) rollover will affect your tax planning.
Why to Avoid a 401(k) Rollover in Richmond Heights, MO
Depending on how close you are to retirement and other factors your Richmond Heights, MO retirement planners at Correct Capital may recommend that your savings are best kept in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and the return on investment is good, there may not be a good reason to roll over your 401(k). 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.
- 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 typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Check out 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
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
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 realize their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Richmond Heights, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically obligated to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and objective, and we are not bound to only offer you limited investment options.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and financial advisors today.
