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 is exciting, but it can also lead to confusion about the best way to handle your existing 401(k). Many St. Louis Hills, 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 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. Louis Hills, MO, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in St. Louis Hills, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A experienced St. Louis Hills, MO financial advisor like those at Correct Capital will be able to look at your financial situation and guide you towards your preferred option. Depending on your specific circumstances, we may recommend to:
- Leave the funds 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).
The last option should only be considered if you need funds quickly. Your previous employer would be obligated to take out 20% of the savings in order to pay taxes on it. You may also face a 10% early withdrawal penalty from the IRS, and you would also have to pay federal, state, and local taxes. Cashing out could leave you with less than half 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 account has less than $5,000 in it. Additionally, you may be required to cash out your plan if it has 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 cost basis and market value of shares of employer stock in your 401(k) plan. If you won shares of your previous company in your 401(k), you can transfer 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 caps out at 20% for the highest earners — instead of income tax, which may be considerably more.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), you will not have any control over the 401(k) company that holds your money. 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 employers provide 401(k) plans that permit a wide range of 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
Consolidate Your 401(k) Plans
If you change jobs frequently, it may make the most sense to merge the funds from all your accounts into one account. That way, you much much more efficiently follow how your savings are growing and you will be able to manage them more efficiently. 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 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 retain our services, we'll help you navigate important considerations, for instance what type of account makes the most sense for your time horizon.
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 funds are better off in a 401(k) account; whether that be your previous employer's or your new one. Some reasons to stick with a 401(k) plan instead of an IRA include:
- If your current 401(k) plan works for you. If the fees aren't too high and the return on investment is good, 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.
- Avoid early withdrawal fees 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. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. 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:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in St. Louis Hills, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor 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 assisting 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 act only in your best interested. As an independent firm, we will always be direct and objective, and we are not bound to only offer you limited investment opportunities.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and financial planners today.
