Rollover 401(k) in St. Clair County, IL
Rollover 401(k) in St. Clair County, IL. Starting a new job in St. Clair County, IL 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. Clair County, IL residents don't have the time, expertise, or interest to oversee 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) specialists and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) counseling in St. Clair County, IL, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in St. Clair County, IL
In general, there are four different things you can do with your 401(k) account with your old employer. A experienced St. Clair County, IL 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 your current financial health and your time horizon, we may advise to:
- Keep your 401(k) with your old employer;
- 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).
The last option is not recommended unless you need money now. Your previous employer would be obligated to take out 20% of the balance for tax purposed. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. That means you might not even see half of the funds.
Another thing to mention is that employers in St. Clair County, IL 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 it has less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in St. Clair County, IL
Your St. Clair County, IL 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 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 other funds to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — instead of 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 institutions based on how secure they are and the range of services they offer.
A Wider Range of Investment Options
While some St. Clair County, IL businesses offer 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you change jobs frequently, there are many advantages to combining all of your savings into one account. In doing so, it won't be nearly as much of a hassle to follow how your savings are growing 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. 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 determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience advising both individuals and business owners in St. Clair County, IL with comprehensive 401(k) services. When you meet with us, we'll walk you through important considerations, such as what type of account makes the most sense for your time horizon.
When Not to Roll Over Your 401(k) into an IRA in St. Clair County, IL
Each of our client's financial situation is unique, and your St. Clair County, IL retirement planners at Correct Capital may recommend that your investments should be left in a 401(k) plan; 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 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, 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.
- No early withdrawal penalties if you are 55. While you can begin taking out funds without a penalty from either 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're considering early retirement.
- You cannot take a loan out of an IRA. 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 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. Clair County, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
Rollover 401(k) in St. Clair County, IL | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their goals. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping St. Clair County, IL individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral obligation to act only in your best interested. As an independent firm, we are free to be honest and objective, and we are not bound to only offer you limited investment options.
Reach out to 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.
