Rollover 401(k) in St. Clair County, IL
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in St. Clair County, IL. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your 401(k) account with your previous employer. Many St. Clair County, IL residents don't have the time, knowledge, 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 retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in St. Clair County, IL, call us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in St. Clair County, IL
Generally speaking, there are four ways to approach your 401(k) rollover. A qualified St. Clair County, IL financial advisor like those at Correct Capital will analyze your finances and help you determine which option is best for you. Depending on your specific circumstances, it may be best 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;
- Cash out your 401(k).
The last option is not recommended unless you need money now. Your previous employer would be required to take out 20% of the balance for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. Meaning, you could potentially lose more than half of the account's value.
One last consideration to note is that many companies in St. Clair County, IL require you to roll over the funds to an IRA or new 401(k) if your plan has less than $5,000 in it. Additionally, 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. 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 market value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can put that increase in value 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 is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be significantly more.
Pick Your Own Custodian
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, the ease of their digital platforms, and the other services they offer.
More Diverse of Investment Options
While some St. Clair County, IL businesses offer 401(k) plans that include a wide range of investment options, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Combine Your Savings Accounts
If you have multiple 401(k) plans with previous employers, it could be incredibly helpful to combine all of your savings into one account. That way, you much much more efficiently follow how your investments 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. By rolling over the funds into an IRA, you continue adding more money over time.
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 advising both individuals and families and business owners in St. Clair County, IL with A-Z 401(k) services. When you meet with us, we'll walk you through important considerations, such as how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in St. Clair County, IL
Depending on how close you are to retirement and other considerations your St. Clair County, IL retirement planners at Correct Capital may advise that your savings are better off in a 401(k) account; whether that be your previous employer's or your new one. Some of the advantages of a 401(k) plan instead of an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and you're getting strong returns, 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 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. 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 should only be considered in certain circumstances, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. 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 keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
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
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
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 along with a host of other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to act only in your best interested. As an independent firm, we are free to be direct and objective, and we are not bound to only offer you limited investment opportunities.