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 manage your 401(k) account with your previous employer. Many St. Charles County, MO residents don't have the time, expertise, or interest to manage multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and retirement consultants will help you understand your options. For rollover 401(k) consulting in St. Charles County, MO, give us a call 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) account with your old employer. A knowledgeable St. Charles County, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on a variety of factors, it may be best 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;
- Take the cash value out of your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer will have to take out 20% of the savings 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 your savings.
Another thing to note is that many companies in St. Charles County, MO obligate you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Furthermore, 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 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 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 cost basis and market value of company stock in your 401(k) account. If part of your 401(k) includes company stock, you can transfer that increase in value into a standard brokerage account, and roll the other funds 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 is often higher.
Pick Your Own Financial Institution
When you opt to put your savings in a 401(k), your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on how secure they are and the range of services they offer.
More of Investment Opportunities
While some St. Charles County, MO employers offer 401(k) plans that allow for a wide range of investment opportunities, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you change jobs frequently, it may make the most sense to incorporate the funds from all your accounts into one plan. That will make it easier to track how your savings are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
Continue Adding Money 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 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 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 retain our services, we'll guide you through special considerations, such as what type of account makes the most sense for your time horizon.
Why to Avoid a 401(k) Rollover in St. Charles County, MO
Each of our client's financial situation is unique, and your St. Charles County, MO retirement planners at Correct Capital may advise that your funds are best kept in a 401(k) account; either your an old plan or rolling them over into a new one. Some reasons to stick with a 401(k) plan over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees are fair and the return on investment is good, 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 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. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings should only be considered in certain circumstances, it is important to know that you cannot take a loan out of an IRA.
- 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 before retirement, it may make more sense to stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
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
Rollover 401(k) in St. Charles County, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience helping St. Charles County, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be direct and objective, 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 knowledgeable 401(k) experts and financial advisors today.
