Rollover 401(k) in Rock Hill, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Rock Hill, MO. While moving to a new job can be a welcome new opportunity, it can also create uncertainty about the best way to handle your 401(k) account with your previous employer. Many Rock Hill, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement planners will help you determine what makes the most sense for you. For rollover 401(k) counseling in Rock Hill, MO, reach out to us today at 314-930-401K or contact us online.
What You Can Do With Your Rollover 401(k) in Rock Hill, MO
In general, there are four different things you can do with your 401(k) account with your old employer. A knowledgeable Rock Hill, MO financial advisor like those at Correct Capital will consider your financial situation and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may advise 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;
- 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 withhold 20% of the funds to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, 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 Rock Hill, 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 the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Rock Hill, MO
Your Rock Hill, MO financial advisors at Correct Capital may recommend 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 increase in value between the original value and market value of shares of employer stock in your 401(k) plan. If part of your 401(k) includes company stock, you can transfer 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 the shares — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be considerably more.
The Custodian of Your Choice
In a 401(k) plan, 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 institutions based on how secure they are and the range of services they offer.
More of Investment Opportunities
While some Rock Hill, MO employers offer 401(k) plans with few limitations on your investment options, 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:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Consolidate Your 401(k) Plans
If you have various 401(k) plans with previous employers, it may make the most sense to incorporate the funds from all your accounts into one plan. In doing so, it won't be nearly as much of a hassle to follow the growth of your funds and managing them will be more streamlined. 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. If you roll the funds out of your old employer's plan, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over two decades of experience helping both individuals and families and business owners in Rock Hill, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate special considerations, such as whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Rock Hill, MO
Depending on your time horizon and other factors your Rock Hill, MO retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan rather than an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees are fair and your savings are growing as you'd like them to, it may be your best option to keep your savings where they are. If the account stops giving you strong returns or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While you can begin taking out savings without a fee from both a 401(k) or IRA at 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 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 isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- Your employer can pay matching contributions into your 401(k) account. Employers may contribute a full or partial match into a 401(k), while an IRA would only include the money you put into it.
Click on the links below to see some of the other services we offer in Rock Hill, 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 Rock Hill, 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, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting Rock Hill, 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 oversee your account in a way that benefits you and only you. As an independent firm, we are free to be straightforward and unbiased, and we are not bound to only offer you limited investment opportunities.