Rollover 401(k) in Sunset Hills, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Sunset Hills, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your existing 401(k). Many Sunset Hills, MO residents don't have the time, financial literacy, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and retirement planners will help you understand your options. For rollover 401(k) consulting in Sunset Hills, MO, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Sunset Hills, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Sunset Hills, 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 your specific circumstances, it may be best to:
- Leave the savings 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;
- Take the cash value out of your 401(k).
The last option should only be considered if you need funds quickly. Your previous employer would be required to take out 20% of the funds for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could potentially lose more than half of your savings.
It is important to note that many employers 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 suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of advantages 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 difference between the cost basis 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 remainder to an IRA. In doing so, 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 is often higher.
Pick Your Own Financial Institution
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred institution based on how secure they are and the range of services they offer.
More of Investment Options
While some Sunset Hills, MO companies provide 401(k) plans with few limitations on your investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Real estate investment trusts
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to incorporate the funds from all your accounts into one plan. That way, you much much more efficiently track how your savings are performing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Continue Adding Money 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. If you roll the funds out of your old employer's plan, you continue adding more money over time.
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 two decades of experience helping both individuals and families and business owners in Sunset Hills, MO with a variety of 401(k) services. When you meet with us, we'll guide you through special considerations, for instance required minimum distribution model makes the most sense for you.
Why Not to Roll Over Your 401(k) into an IRA 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 savings are better off in a 401(k) account; either your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are fair and the return on investment is good, 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 penalties if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you're considering early retirement.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't advisable, it is important to mention that you cannot take a loan out of either a Traditional or Roth IRA.
- 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.
See some of the other services we offer in Sunset Hills, MO:
- 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
- Retirement Calculator
- Retirement Planning
Rollover 401(k) in Sunset Hills, 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 Sunset Hills, 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 act only in your best interested. As an independent firm, we are free to be straightforward and objective, and we are not bound to only offer you limited investment opportunities.