Rollover 401(k) in Tower Grove, MO
Rollover 401(k) in Tower Grove, MO. Starting a new job in Tower Grove, MO can lead to new opportunities, but it can also create confusion about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Tower Grove, MO residents have found that seeking the help of professional 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 retirement planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) consulting in Tower Grove, MO, reach out to us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Tower Grove, MO
In general, there are four different things you can do with your 401(k) plan with your old employer. A experienced Tower Grove, MO financial advisor like those at Correct Capital will be able to look at your assets, savings, and 401(k) plan and help you decide which option is best for you. Depending on a variety of factors, 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).
Cashing out is only truly an option if you need funds quickly. Your previous employer will have to withhold 20% of the savings for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of the account's value.
It is important to mention that companies in Tower Grove, MO are allowed to make you move the money if your plan has less than $5,000 in it. Furthermore, 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 Tower Grove, MO
Your Tower Grove, 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 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 transfer that increase in value into a standard brokerage account, and roll the other funds to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
The Financial Institution of Your Choice
When you opt to put your savings 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.
A Wider Array of Investment Opportunities
While some Tower Grove, MO businesses offer 401(k) plans that allow for a wide range of 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:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, there are many advantages to combining all of your savings into one account. That way, you much much more efficiently follow the growth of your funds 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 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. 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 determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience assisting both individuals and business owners in Tower Grove, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, such as how a 401(k) rollover will affect your tax planning.
Why to Avoid a 401(k) Rollover in Tower Grove, MO
Depending on how close you are to retirement and other considerations your Tower Grove, MO retirement planners at Correct Capital may recommend that your investments should be left in a 401(k) plan; either 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 are:
- If you like the benefits of your current 401(k) plan. If the fees are reasonable and you're getting strong returns, there may not be a good reason to roll over your 401(k). the fees change in the future or you change your mind for a different reason, you retain the right to roll over the funds whenever you'd like.
- Avoid early withdrawal fees if you are 55. While both 401(k)s and IRAs permit 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 should only be considered in certain circumstances, 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 dollar-for-dollar or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Check out some of the other services we offer in Tower Grove, 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 Tower Grove, MO | 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 75 years of combined experience helping Tower Grove, MO individuals and families with 401(k) rollovers along with many 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 unbiased, and we are not bound to only offer you limited investment opportunities.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) specialists and retirement consultants today.
