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 also create uncertainty about the best way to handle your 401(k) account with your previous employer. Many St. Peters, 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) specialists and retirement planners will help you get the most out of your savings. For rollover 401(k) counseling in St. Peters, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in St. Peters, MO
Typically, you have four options when considering whether to roll over your 401(k). A professional St. Peters, MO financial advisor like those at Correct Capital will consider your financial situation and guide you towards what will work best for you. Depending on a variety of factors, 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;
- Take the cash value out of your 401(k).
Cashing out is not advisable unless you need money now. Your previous employer would be obligated to withhold 20% of the funds in order to pay taxes 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 50% of the account's value.
Another thing to note is that many employers in St. Peters, 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. Lastly, they may be able to cash out your account if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in St. Peters, MO
Your St. Peters, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). 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 retirement 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. This way, you may pay long term capital gains tax on the shares — which is usually 15% but can go up to 20% for people with high-income — instead of 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 savings. By rolling over to an IRA, you'll be able to choose your preferred institution based on how secure they are and the range of services they offer.
A Wider Array of Investment Options
While some St. Peters, MO employers provide 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
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to incorporating all of your savings into one plan. That way, you much much more efficiently track how your savings are growing and you will be able to manage them more efficiently. Sustained long-term growth may also be more attainable.
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 decide if a 401(k) rollover is the best option for you. We have more than two decades of experience assisting both individuals and families and business owners in St. Peters, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate important considerations, such as required minimum distribution model makes the most sense for you.
Why Not to Roll Over Your 401(k) into an IRA in St. Peters, MO
Every person's finances vary, and your St. Peters, MO retirement planners at Correct Capital may recommend that your investments are best kept in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some of the advantages of 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, it may be advisable 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.
- Avoid early withdrawal fees if you are 55. While you can begin taking out savings without a fee from both a 401(k) or IRA at 59½, you will not face a 10% early withdrawal fee taking money out of a 401(k) once you have turned 55. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, it is important to mention that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer can pay matching contributions into your 401(k) account. 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 stick with a 401(k) your employer will match your contributions.
Take a look at some of the other services we offer in St. Peters, MO:
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 achieve their goals. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience assisting St. Peters, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we are legally and ethically obligated to manage your account in a way that benefits you and only you. As an independent firm, we are free to be straightforward and objective, and we are not bound to only offer you limited investment options.
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 retirement consultants today.
