Rollover 401(k) in Swansea, IL
Rollover 401(k) in Swansea, IL. Starting a new job in Swansea, IL can lead to new opportunities, but it can also lead to uncertainty about the best way to manage your existing 401(k). Many Swansea, IL 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 experienced team of 401(k) experts and financial planners will help you determine what makes the most sense for you. For rollover 401(k) services in Swansea, IL, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Swansea, IL
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Swansea, IL financial advisor like those at Correct Capital will consider your financial situation and guide you towards your preferred option. Depending on a variety of factors, we may recommend to:
- Leave the money in your former employer's 401(k) plan;
- 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 is only truly an option if you need funds quickly. Your previous employer will have to take out 20% of the balance in order to pay taxes on it. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. That means you might not even see half of the account's value.
It is important to note that employers in Swansea, IL 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.
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Benefits to Rolling Over a 401(k) into an IRA in Swansea, IL
Your Swansea, IL 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 advantages to this strategy:
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 original value and current value of shares of employer 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 other funds 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 significantly more.
Pick Your Own Financial Institution
When you opt to put your retirement funds in a 401(k), 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 stability, trading technology, and financial services.
More Diverse of Investment Options
While some Swansea, IL businesses provide 401(k) plans with few limitations on your investment opportunities, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you change jobs frequently, it may make the most sense to incorporate the entirety of your retirement funds into one place. 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.
Keep Contributing 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 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 families and business owners in Swansea, IL with numerous 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, for instance whether a traditional or Roth IRA is best for you.
Why Not to Roll Over Your 401(k) into an IRA in Swansea, IL
Depending on your time horizon and other considerations your Swansea, IL retirement planners at Correct Capital may recommend that your savings are better off 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 over an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and you're getting strong returns, it may be your best option to keep your savings where they are. If the account stops performing or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, you will not face 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.
- 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 know 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 full or partial match into a 401(k), while an IRA would only include the money you put into it.
Take a look at some of the other services we offer in Swansea, IL:
Rollover 401(k) in Swansea, IL | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting Swansea, IL individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically obligated to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be direct and objective, and there are no limitations to the services or investment options we can offer you.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and financial planners today.
