Rollover 401(k) in St. Louis County, MO
Rollover 401(k) in St. Louis County, MO. While moving to a new job can be a welcome change, it can also create confusion about the best way to handle your 401(k) account with your previous employer. Many St. Louis County, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and financial planners will help you get the most out of your savings. For rollover 401(k) services in St. Louis County, MO, give us a call at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in St. Louis County, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A knowledgeable St. Louis County, MO financial advisor like those at Correct Capital will consider your financial situation and guide you towards what will work best for you. 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 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).
The last option is not advisable unless you need money now. Your previous employer would be required to withhold 20% of the savings for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. That means you might not even see 50% of the funds.
It is important to note that many businesses in St. Louis County, MO require you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Additionally, they may be able to cash out your account if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in St. Louis County, MO
Your St. Louis County, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 shares of employer stock in your 401(k) account. If part of your 401(k) includes company stock, 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 your company stock — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which may be significantly more.
The Custodian of Your Choice
In a 401(k) plan, the money will be held by the 401(k) company your employer chooses. When you do a 401(k) rollover to a Traditional or Roth 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 Opportunities
While some St. Louis County, MO employers provide 401(k) plans with few limitations on your 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to merge all of your savings into one place. That way, you much much more efficiently track how your savings are growing and managing them will be more streamlined. 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 guide you in your decision of what to do during a 401(k) rollover. We have over 20 years of experience assisting both individuals and families and business owners in St. Louis County, MO with A-Z 401(k) services. When you meet with us, we'll help you navigate special considerations, such as how a 401(k) rollover will affect your tax planning.
When Not to Roll Over Your 401(k) into an IRA in St. Louis County, MO
Depending on how close you are to retirement and other factors your St. Louis County, MO retirement planners at Correct Capital may recommend that your funds should be left 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 over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and you're getting strong returns, 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.
- No early withdrawal fees if you are 55. While you can begin taking out savings without a penalty from either a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. A 401(k) may be best if you need or want the money sooner.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't advisable, 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) your employer will match your contributions.
Click on the links below to see some of the other services we offer in St. Louis 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. Louis 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 status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting St. Louis County, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral imperative to manage your account in a way that benefits you and only you. As an independent firm, we will always be honest and unbiased, and we are not bound to only offer you limited investment opportunities.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) specialists and retirement planners today.
