Rollover 401(k) in St. Louis, MO
Rollover 401(k) in St. Louis, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with your 401(k) account with your previous employer. Many St. Louis, 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) experts and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in St. Louis, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in St. Louis, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A knowledgeable St. Louis, 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 funds 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).
The last option is only truly an option if you need funds quickly. Your previous employer would be obligated to take out 20% of the savings to prepay the taxes you would owe on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to note that businesses in St. Louis, MO are allowed to make you move the money if your plan 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, MO
Your St. Louis, MO financial advisors at Correct Capital may suggest rolling over your 401(k) into an Individual Retirement Account (IRA). 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 increase in value between the cost basis and current value of company stock in your 401(k) plan. If part of your 401(k) includes company stock, you can transfer that increase in value into a standard brokerage account, and roll the other funds to an IRA. The advantage of this is that you may pay long term capital gains tax on the shares — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
Pick Your Own Custodian
In a 401(k) plan, you will not have any control over the 401(k) company that holds your funds. By rolling over to an IRA, you'll have your pick of institutions based on stability, trading technology, and financial services.
More of Investment Opportunities
While some St. Louis, MO businesses 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
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
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 will make it easier to follow the growth of your funds and managing them will be more streamlined. 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. If you roll the funds out of your old employer's plan, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have more than 20 years of experience advising both individuals and families and business owners in St. Louis, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, such as required minimum distribution model makes the most sense for you.
Why to Avoid a 401(k) Rollover in St. Louis, MO
Depending on your time horizon and other factors your St. Louis, MO retirement planners at Correct Capital may advise that your savings are better off in a 401(k) plan; either your previous employer's or your new one. Some reasons to stick with a 401(k) plan rather than 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, there may not be a great reason to roll over your 401(k). If the account stops performing or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- No early withdrawal fees if you are 55. While both 401(k)s and IRAs permit 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 a few years early.
- 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 an IRA.
- 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 stick with a 401(k) your employer will match your contributions.
Check out some of the other services we offer in St. Louis, MO:
- Financial Planning
- Retirement Plan Consultants
- 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, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and tailor our services and advice to their current financial health, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding St. Louis, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we are legally and ethically bound to act only in your best interested. As an independent firm, we will always be straightforward and objective, and we are not bound to only offer you limited investment options.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) specialists and financial advisors today.
