Rollover 401(k) in St. Louis Hills, MO
Rollover 401(k) in St. Louis Hills, MO. Starting a new job in St. Louis Hills, MO can lead to new opportunities, but it can also lead to confusion about the best way to handle the savings you have in your 401(k) account with your previous employer. Many St. Louis Hills, MO 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 dedicated team of 401(k) experts and financial advisors will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) services in St. Louis Hills, MO, reach out to us today at 314-930-401K or contact us online.
Rollover 401(k) Options in St. Louis Hills, MO
In general, you have four options when considering whether to roll over your 401(k). A professional St. Louis Hills, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards what will work best for you. Depending on your specific circumstances, we may advise to:
- Leave the money in your former employer's 401(k) plan;
- 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).
Taking out the cash value is not recommended unless you need money now. Your previous employer will have to withhold 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. Meaning, you could lose the majority of the account's value.
It is important to mention that many companies 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. Furthermore, 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 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:
Take Advantage of 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 shares of employer stock in your retirement plan. If part of your 401(k) includes company stock, you can put that increase in value into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — rather than income tax, which may be significantly more.
The Custodian of Your Choice
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of institutions based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Options
While some St. Louis Hills, MO businesses provide 401(k) plans that allow for a wide array of 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, it could be incredibly helpful to combine the funds from all your accounts into one plan. That way, you much much more efficiently follow the performance of your funds and you will be able to manage them more efficiently. It may also be the better option for long-term growth.
Continue Adding Money to Your Accounts
While your money will still grow in you old 401(k) plan, you will no longer be able to contribute more savings to it. If you roll the funds out of your old employer's plan, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have over 20 years of experience advising both individuals and families and business owners in St. Louis Hills, MO with A-Z 401(k) services. When you meet with us, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
Why 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 savings are best kept in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. If the fees aren't exorbitant and your savings are growing as you'd like them to, there may not be a good reason to roll over your 401(k). If the account stops performing or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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, 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 while you are still working, 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. Louis Hills, 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
- Social Security Consultants Near Me
Rollover 401(k) in St. Louis Hills, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience helping St. Louis Hills, 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 moral imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and objective, and there are no restrictions to the services or investment options we can offer you.
Call us today at 314-930-401K or contact us online to schedule an appointment with one of our experienced 401(k) specialists and retirement consultants today.
