Rollover 401(k) in Swansea, IL
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Swansea, IL. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with the savings you have in your existing 401(k). Many Swansea, IL residents don't have the time, financial literacy, or interest to oversee multiple retirement accounts or to understand the best way to approach a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial planners will help you understand your options. For rollover 401(k) counseling in Swansea, IL, give us a call at 314-930-401K or contact us online.
Rollover 401(k) Options in Swansea, IL
Typically, there are four different things you can do with your 401(k) account with your old employer. A professional Swansea, IL financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and guide you towards your preferred option. Depending on your specific circumstances, 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;
- Cash out your 401(k).
Taking out the cash value is not advisable unless you need money now. Your previous employer would be required to withhold 20% of the funds for tax purposed. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Cashing out could leave you with less than half of the funds.
Another thing to mention is that employers in Swansea, IL are allowed to make you move the money if your plan has less than $5,000 in it. Lastly, they may be able to cash out your account if it has 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 difference between the cost basis and market value of shares of employer stock in your retirement account. If part of your 401(k) includes company stock, you can put that portion of your account into a standard brokerage account, and roll the remainder to an IRA. The advantage of this is that you may pay long term capital gains tax on the shares — which is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
The Custodian of Your Choice
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
More Diverse of Investment Opportunities
While some Swansea, IL businesses offer 401(k) plans with few limitations on your investment options, 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, it may make the most sense to incorporate the entirety of your retirement funds into one account. That will make it easier to follow how your savings are performing and managing them will be more streamlined. 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. By rolling over the funds into an IRA, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have more than two decades of experience advising both individuals and families and business owners in Swansea, IL with A-Z 401(k) services. When you meet with us, we'll guide you through special considerations, for instance which type of savings plan fits best in your portfolio.
When Not to Roll Over Your 401(k) into an IRA in Swansea, IL
Depending on how close you are to retirement and other considerations your Swansea, IL retirement planners at Correct Capital may advise that your investments should be left in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan over 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, 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.
- Avoid early withdrawal fees if you are 55. While you can begin taking out savings without a penalty from both a 401(k) or IRA at 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, you would only be able to do so if they are in a 401(k) plan.
- Your employer may match your 401(k) contributions. While some employers will allow you to roll money out of your 401(k) to an IRA before retirement, it may make more sense to keep contributing to your 401(k) to receive an employer match and keep your retirement assets in one place.
Click on the links below to see some of the other services we offer in Swansea, IL:
- 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 Swansea, IL | Correct Capital
At Correct Capital, we give all of our clients personalized attention and tailor 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 helping Swansea, IL individuals and families with 401(k) rollovers as part of our comprehensive 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 straightforward and objective, and there are no limitations to the services or investment options we can offer you.