Rollover 401(k) in St. Louis, MO
Rollover 401(k) in St. Louis, MO. Starting a new job in St. Louis, MO is exciting, but it can be hard to know what to do with your existing 401(k). Many St. Louis, MO residents don't have the time, knowledge, or interest to oversee multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and retirement planners will help you get the most out of your savings. For rollover 401(k) consulting in St. Louis, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in St. Louis, MO
In general, there are four ways to approach your 401(k) rollover. A knowledgeable St. Louis, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on a variety of factors, it may be best to:
- Keep your 401(k) with your old employer;
- 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).
Cashing out is not advisable unless you need money now. Your previous employer would be obligated to take out 20% of the balance for tax purposed. Depending on how close you are to retirement, the IRS may also take a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
One last consideration to note is that companies in St. Louis, MO are allowed to make you move the money if your account has less than $5,000 in it. Furthermore, 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 counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. There are a variety of benefits to this strategy:
Take Advantage of 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 retirement 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. 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 Financial Institution
When you opt to put your retirement funds in a 401(k), 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 stability, trading technology, and financial services.
More Diverse of Investment Opportunities
While some St. Louis, MO employers offer 401(k) plans with few limitations on your investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Stocks
- 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 may make the most sense to combine 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.
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. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over 20 years of experience helping both individuals and business owners in St. Louis, MO with comprehensive 401(k) services. When you retain our services, 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
Every person's finances vary, and your St. Louis, MO retirement planners at Correct Capital may recommend that your funds are better off in a 401(k) plan; either your previous employer's or your new one. Some of the advantages of a 401(k) plan over an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are fair and the return on investment is good, 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 penalties if you are 55. While you can begin taking out money without a fee from both a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire a few years early.
- You cannot take a loan out of an IRA. 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 dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Click on the links below to see some of the other services we offer in St. Louis, MO:
- 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
- Social Security Consultants Near Me
Rollover 401(k) in St. Louis, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater 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 seven decades of combined experience helping St. Louis, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we have a legal and moral obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and unbiased, and there are no limitations to the services or investment options we can recommend.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) specialists and financial advisors today.
