Rollover 401(k) in Shrewsbury, MO
Rollover 401(k) in Shrewsbury, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with the savings you have in your existing 401(k). Many Shrewsbury, 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 dedicated team of 401(k) experts and financial planners will help you understand your options. For rollover 401(k) services in Shrewsbury, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Shrewsbury, MO
In general, there are four ways to approach your 401(k) rollover. A knowledgeable Shrewsbury, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may recommend 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;
- Cash out your 401(k).
The last option should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the savings for tax purposed. 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 your savings.
It is important to mention that businesses in Shrewsbury, 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 the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Shrewsbury, MO
Your Shrewsbury, 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:
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 cost basis and market value of company stock in your 401(k) account. 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. In doing so, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — instead of income tax, which is often higher.
The Custodian of Your Choice
When you opt to put your retirement funds in a 401(k), the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More Diverse of Investment Options
While some Shrewsbury, MO employers 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it may make the most sense to merge the funds from all your accounts into one account. That way, you much much more efficiently track how your investments are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
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 continue adding more money over time.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over 20 years of experience assisting both individuals and families and business owners in Shrewsbury, MO with comprehensive 401(k) services. When you meet with us, we'll help you navigate special considerations, for instance whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Shrewsbury, MO
Every person's finances vary, and your Shrewsbury, MO retirement planners at Correct Capital may recommend that your savings are best kept in a 401(k) account; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan over an IRA include:
- If your current 401(k) plan works for you. 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. the fees change in the future or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out money 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 need or want the money sooner.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, it is important to mention that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer may match your 401(k) contributions. 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 Shrewsbury, MO:
Rollover 401(k) in Shrewsbury, MO | Correct Capital
At Correct Capital, we give all of our clients personalized 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 aiding Shrewsbury, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we will always be honest and unbiased, and there are no restrictions to the services or investment opportunities we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) specialists and retirement planners today.
