Rollover 401(k) in Swansea, IL
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Swansea, IL. Starting a new job in Swansea, IL is exciting, but it can also create confusion about the best way to manage your 401(k) account with your previous employer. Many Swansea, IL residents don't have the time, expertise, or interest to manage multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) specialists and retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Swansea, IL, reach out to us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Swansea, IL
Generally speaking, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Swansea, IL financial advisor like those at Correct Capital will consider your finances and guide you towards what will work best for you. Depending on a variety of factors, it may be best to:
- Leave the funds 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;
- Take the cash value out of your 401(k).
The last option is only truly an option if you need funds quickly. Your previous employer will have to take out 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. Cashing out could leave you with less than 50% of the account's value.
It is important to note that many employers in Swansea, IL require you to move the funds in your 401(k) if your plan has less than $5,000 in it. Furthermore, you may be required to cash out your plan if the balance is less than $1,000.
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. 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 retirement account. If part of your 401(k) includes company stock, you can put that difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. This way, you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be significantly more.
Pick Your Own Custodian
When you opt to put your retirement funds in a 401(k), you will not have any control over the 401(k) company that holds your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
More of Investment Opportunities
While some Swansea, IL businesses 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:
- 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, there are many advantages to merging the entirety of your retirement funds into one plan. In doing so, it won't be nearly as much of a hassle to follow the performance of your funds and you will be able to manage them more directly. You could also see greater long-term gains.
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 over 20 years of experience helping both individuals and business owners in Swansea, IL with A-Z 401(k) services. When you hire Correct Capital, we'll guide you through special considerations, for instance what type of account makes the most sense for your time horizon.
When Not to Roll Over Your 401(k) into an IRA in Swansea, IL
Each of our client's financial situation is unique, and your Swansea, IL retirement planners at Correct Capital may advise that your funds are best kept in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to stick with 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 your savings are growing as you'd like them to, it may make the most sense 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.
- No early withdrawal fees if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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 taking a loan from retirement savings isn't advisable, 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 you are the only contributor if you put your savings into an IRA.
See some of the other services we offer in Swansea, IL:
- Wealth Management
- 401k Companies
- Financial Advisor
- Asset Management
- Retirement Consultant
- Financial Portfolio Management
- 401(k) Rollover
- Financial Advice
- Retirement Planning Services
Rollover 401(k) in Swansea, IL | 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 helping Swansea, IL individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interested. As an independent firm, we are free to be straightforward and unbiased, and there are no restrictions to the services or investment opportunities we can recommend.