Rollover 401(k) in St. Charles County, MO
Rollover 401(k) in St. Charles County, MO. While moving to a new job can be a welcome new opportunity, it can also create confusion about the best way to handle your 401(k) account with your previous employer. Many St. Charles County, MO residents don't have the time, expertise, or interest to oversee multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in St. Charles County, MO, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in St. Charles County, MO
Generally speaking, there are four different things you can do with your 401(k) plan with your old employer. A professional St. Charles County, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards your preferred option. Depending on a variety of factors, we may recommend 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 should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the savings in order to pay taxes on it. Depending on how close you are to retirement, the IRS may also take a 20% early withdrawal penalty, 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.
It is important to note that companies in St. Charles County, MO are allowed to make you move the money if your plan 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 St. Charles County, MO
Your St. Charles County, 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 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 original value and current value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can put that increase in value into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. This way, 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 may be substantially more.
Pick Your Own Financial Institution
When you opt to put your savings in a 401(k), you will not have any control over the 401(k) company that holds 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 St. Charles County, MO companies offer 401(k) plans that allow for a wide range of investment options, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- 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 entirety of your retirement funds into one plan. That way, you much much more efficiently follow the performance of your funds and you will be able to manage them more efficiently. You could also see greater long-term gains.
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 may be eligible to keep contributing to the plan you've picked out.
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 more than 20 years of experience assisting both individuals and families and business owners in St. Charles County, MO with numerous 401(k) services. When you meet with us, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in St. Charles County, MO
Depending on how close you are to retirement and other considerations your St. Charles County, MO retirement planners at Correct Capital may advise that your funds should be left in a 401(k) account; whether that be your previous employer's or your 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 fair and your savings are growing as you'd like them to, there may not be a great reason to roll over your 401(k). If the account stops performing or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out savings without a penalty from either a 401(k) or IRA at 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- Loans from an IRA are not allowed. 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 can put matching contributions into your 401(k) account. 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.
Check out some of the other services we offer in St. Charles County, 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 St. Charles County, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater 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 seven decades of combined experience aiding St. Charles County, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically bound to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be direct and objective, 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 consultants today.
