Rollover 401(k) in Sunset Hills, MO
Rollover 401(k) in Sunset Hills, MO. While moving to a new job can be a welcome change, it can be hard to know what to do with the savings you have in your existing 401(k). Many Sunset Hills, MO residents have found that enlisting the services of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement consultants will help you understand your options. For rollover 401(k) consulting in Sunset Hills, MO, reach out to us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Sunset Hills, MO
In general, you have four options when considering whether to roll over your 401(k). A knowledgeable Sunset Hills, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on your current financial health and your time horizon, it may be best 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).
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 also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to note that many companies in Sunset Hills, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Lastly, 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 Sunset Hills, MO
Your Sunset Hills, 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:
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 original value and market value of company stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can put that increase in value into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. The advantage of this is that 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 — rather than income tax, which is often higher.
The Financial Institution of Your Choice
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 stability, trading technology, and financial services.
A Wider Range of Investment Options
While some Sunset Hills, MO companies provide 401(k) plans with few limitations on your investment opportunities, you will generally have much more control over an IRA than you would in a 401(k) plan. 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 change jobs frequently, it could be incredibly helpful to combine all of your savings into one plan. In doing so, it won't be nearly as much of a hassle to follow how your savings are performing and you will be able to manage them more efficiently. You could also see greater long-term gains.
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 will be able to supplement your savings.
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 assisting both individuals and business owners in Sunset Hills, MO with comprehensive 401(k) services. When you hire Correct Capital, we'll help you navigate special considerations, such as which type of savings plan fits best in your portfolio.
Why to Avoid a 401(k) Rollover in Sunset Hills, MO
Each of our client's financial situation is unique, and your Sunset Hills, MO retirement planners at Correct Capital may advise that your funds are better off in a 401(k) plan; 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 you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and your savings are growing as you'd like them to, it may be advisable to keep your savings where they are. 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.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs permit 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. So, a 401(k) may be preferable if you would like to retire earlier.
- 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 full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Take a look at some of the other services we offer in Sunset Hills, 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
Rollover 401(k) in Sunset Hills, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater 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 Sunset Hills, MO individuals and families with 401(k) rollovers along with a host of other wealth management services. As fiduciary advisors, we are legally and ethically obligated to act only in your best interested. As an independent firm, we are free to be direct and objective, and we are not bound to only offer you limited investment opportunities.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and retirement consultants today.
