Rollover 401(k) in St. Charles, MO
Rollover 401(k) in St. Charles, MO. Moving to a new job in St. Charles, MO can lead to new opportunities, but it can be hard to know what to do with the savings you have in your existing 401(k). Many St. Charles, 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 navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in St. Charles, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in St. Charles, MO
Generally speaking, there are four ways to approach your 401(k) rollover. A qualified St. Charles, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on your current financial health and your time horizon, we may advise to:
- Leave the savings 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 will have to withhold 20% of the savings in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. That means you might not even see half of the funds.
One last consideration to note is that many businesses in St. Charles, 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. Lastly, 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 St. Charles, MO
Your St. Charles, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). This is beneficial for several different reasons:
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 current value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can transfer that portion of your account into a standard brokerage account, and roll the remainder to an IRA. The advantage of this is that you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Options
While some St. Charles, MO companies provide 401(k) plans that include 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
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, there are many advantages to combining all of your savings into one account. That will make it easier to track how your savings are growing and you will be able to manage them more directly. Sustained long-term growth may also be more attainable.
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 will be able to supplement your savings.
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 over two decades of experience assisting both individuals and families and business owners in St. Charles, MO with numerous 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, for instance how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in St. Charles, MO
Each of our client's financial situation is unique, and your St. Charles, MO retirement planners at Correct Capital may advise that your savings should be left in a 401(k) plan; either your previous employer's or your new one. Some of the advantages of a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. If the fees aren't too high and your savings are growing as you'd like them to, it may make the most sense to keep your savings where they are. 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 you can begin taking out money without a penalty from both a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- You cannot take a loan out of an IRA. 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.
Click on the links below to see some of the other services we offer in St. Charles, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in St. Charles, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention 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 nearly a century of combined experience helping St. Charles, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interested. As an independent firm, we will always be honest and objective, and we are not bound to only offer you limited investment options.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and financial planners today.
