Rollover 401(k) in St. Peters, MO
Rollover 401(k) in St. Peters, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with the savings you have in your 401(k) account with your previous employer. Many St. Peters, MO residents have found that enlisting the services 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 financial advisors will help you understand your options. For rollover 401(k) advice in St. Peters, MO, give us a call at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in St. Peters, MO
Typically, there are four different things you can do with your 401(k) account with your old employer. A professional St. Peters, MO financial advisor like those at Correct Capital will be able to look at your financial situation and help you decide which option is best for you. Depending on your specific circumstances, we may advise to:
- Keep your 401(k) with your old employer;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the savings to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. That means you might not even see half of your savings.
Another thing to note is that businesses in St. Peters, MO are allowed to make you move the money 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. Peters, MO
Your St. Peters, 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 difference between the cost basis and current value of company stock in your 401(k) account. 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. This way, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — instead of income tax, which may be substantially more.
Pick Your Own Financial Institution
In a 401(k) plan, you will not have any control over the 401(k) company that holds your money. By rolling over to an 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 Diverse of Investment Options
While some St. Peters, MO businesses provide 401(k) plans that permit a wide array of 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:
- 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, there are many advantages to combining all of your savings into one place. That way, you much much more efficiently track how your investments are performing and you will be able to manage them more directly. 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. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience advising both individuals and business owners in St. Peters, MO with numerous 401(k) services. When you hire Correct Capital, we'll walk you through important considerations, for instance required minimum distribution model makes the most sense for you.
Why to Avoid a 401(k) Rollover in St. Peters, MO
Depending on your time horizon and other factors your St. Peters, MO retirement planners at Correct Capital may advise that your investments are best kept in a 401(k) plan; either your previous employer's or your 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 aren't too high and you're getting strong returns, 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.
- No early withdrawal fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, you will not have to pay a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. A 401(k) may be best if you need or want the money sooner.
- Loans from an IRA are not allowed. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, 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. Peters, 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. Peters, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them realize their objectives. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding St. Peters, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and ethical imperative to act only in your best interested. As an independent firm, we are free to be honest and unbiased, and there are no restrictions to the services or investment options we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and financial planners today.
