Rollover 401(k) in Rock Hill, MO
Rollover 401(k) in Rock Hill, MO. Moving to a new job in Rock Hill, MO can lead to new opportunities, but it can also create uncertainty about the best way to handle the savings you have in your existing 401(k). Many Rock Hill, 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 navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Rock Hill, MO, reach out to us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Rock Hill, MO
In general, you have four options when considering whether to roll over your 401(k). A qualified Rock Hill, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards what will work best for you. Depending on a variety of factors, we may recommend 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;
- Cash out your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer would be required to take out 20% of the savings in order to pay taxes on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than 50% of your savings.
Another thing to note is that many businesses in Rock Hill, MO require you to move the funds in your 401(k) if your account has less than $5,000 in it. Additionally, 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 Rock Hill, MO
Your Rock Hill, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of advantages 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 difference 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 transfer that difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
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 be able to choose your preferred custodian based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some Rock Hill, MO employers provide 401(k) plans that permit a wide array of 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
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have various 401(k) plans with previous employers, there are many advantages to merging all of your savings into one place. That way, you much much more efficiently track how your investments are performing and managing them will be more streamlined. 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. If you roll the funds out of your old employer's plan, 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 assisting both individuals and business owners in Rock Hill, MO with A-Z 401(k) services. When you meet with us, we'll walk you through important considerations, for instance what type of account makes the most sense for your time horizon.
Why to Avoid a 401(k) Rollover in Rock Hill, MO
Every person's finances vary, and 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 previous employer's or your new one. Some reasons to stick with a 401(k) plan over an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and you're getting strong returns, there may not be a great 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.
- Avoid early withdrawal penalties if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. A 401(k) may be best if you need or want the money sooner.
- Loans from an IRA are not allowed. While typically not advisable, 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.
See some of the other services we offer in Rock Hill, 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 Rock Hill, MO | Correct Capital
At Correct Capital, we give all of our clients personalized guidance and tailor our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting Rock Hill, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically required to act only in your best interested. As an independent firm, we will always be direct and unbiased, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and financial advisors today.
