Rollover 401(k) in St. Louis Hills, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in St. Louis Hills, MO. Moving to a new job in St. Louis Hills, MO is exciting, but it can also lead to uncertainty about the best way to manage your existing 401(k). Many St. Louis Hills, MO residents have found that seeking the help of qualified financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you understand your options. For rollover 401(k) advice in St. Louis Hills, MO, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in St. Louis Hills, MO
Typically, there are four different things you can do with your 401(k) account with your old employer. A professional St. Louis Hills, MO financial advisor like those at Correct Capital will analyze your financial situation and guide you towards what will work best for you. Depending on your current financial health and your time horizon, it may be best 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;
- Cash out your 401(k).
Taking out the cash value is not recommended unless you need money now. Your previous employer would be obligated to withhold 20% of the funds in order to pay taxes on it. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to note that many employers in St. Louis Hills, MO obligate you to roll over the funds to an IRA or new 401(k) if your plan 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. Louis Hills, MO
Your St. Louis Hills, 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. 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 increase in value between the original value and current value of shares of employer stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can put that portion of your account into a standard brokerage account, and roll the remainder to an IRA. In doing so, 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
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. By rolling over to an IRA, you'll have your pick of institutions based on stability, trading technology, and financial services.
A Wider Range of Investment Opportunities
While some St. Louis Hills, MO businesses offer 401(k) plans that permit a wide array of investment opportunities, you will generally have much more control over an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to combine all of your savings into one account. In doing so, it won't be nearly as much of a hassle to track how your savings are growing and you will be able to manage them more directly. It may also be the better option for long-term growth.
Keep Contributing to Your Accounts
While you will still see return on your investments in you old 401(k) plan, you will no longer be able to contribute more savings to it. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience assisting both individuals and business owners in St. Louis Hills, MO with a variety of 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, such as required minimum distribution model makes the most sense for you.
When Not to Roll Over Your 401(k) into an IRA in St. Louis Hills, MO
Each of our client's financial situation is unique, and your St. Louis Hills, MO retirement planners at Correct Capital may advise that your investments should be left in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and your savings are growing as you'd like them to, it may make the most sense to keep your savings where they are. If the account doesn't perform as well or you change your mind for another reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out money without a fee 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.
- Loans from an IRA are not allowed. While taking a loan from retirement savings should only be considered in certain circumstances, it is important to note that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer can put matching contributions into your 401(k) plan. Employers may contribute a full or partial match into a 401(k), while an IRA would only include the money you put into it.
Check out some of the other services we offer in St. Louis Hills, MO:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
Rollover 401(k) in St. Louis Hills, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting St. Louis Hills, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we are free to be honest and unbiased, and we are not bound to only offer you limited investment opportunities.