Rollover 401(k) in Tower Grove, MO
Rollover 401(k) in Tower Grove, MO. Moving to a new job in Tower Grove, MO can lead to new opportunities, but it can be hard to know what to do with the savings you have in your existing 401(k). Many Tower Grove, MO residents don't have the time, expertise, or interest to manage 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) experts and retirement consultants will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Tower Grove, MO, give us a call at 877-930-4015 or contact us online.
Rollover 401(k) Options in Tower Grove, MO
Typically, there are four ways to approach your 401(k) rollover. A experienced Tower Grove, MO financial advisor like those at Correct Capital will analyze your financial situation and guide you towards what will work best for you. Depending on your current financial health and your time horizon, we may recommend to:
- Leave the money 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;
- Cash out your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer would be required to withhold 20% of the savings for tax purposed. 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.
One last consideration to note is that employers 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 the balance is 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 suggest rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 increase in value between the original value and market value of shares of employer stock in your 401(k) plan. If you won shares of your previous company in your 401(k), you can put that portion of your account 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 the shares — which caps out at 20% for the highest earners — instead of income tax, which is often higher.
Pick Your Own Custodian
When you opt to put your savings in a 401(k), the money will be held by the 401(k) company your employer chooses. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More of Investment Options
While some Tower Grove, MO companies 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:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, it may make the most sense to combine all of your savings into one account. In doing so, it won't be nearly as much of a hassle to track how your savings are growing and you will be able to manage them more efficiently. 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 will be able to supplement your savings.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have over two decades of experience advising both individuals and families and business owners in Tower Grove, MO with comprehensive 401(k) services. When you meet with us, we'll help you navigate special considerations, such as what type of account makes the most sense for your time horizon.
When to Avoid a 401(k) Rollover in Tower Grove, MO
Depending on your time horizon and other considerations your Tower Grove, MO 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 of the advantages of a 401(k) plan over an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and you're getting strong returns, there may not be a great reason to roll over your 401(k). 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.
- Avoid early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, you will not have to pay 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're considering early retirement.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- Your employer can put matching contributions into your 401(k) account. While some employers will allow you to roll money out of your 401(k) to an IRA while you are still working, it may make more sense to keep contributing to your 401(k) your employer will match your contributions.
Click on the links below to see 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
- Social Security Consultants Near Me
Rollover 401(k) in Tower Grove, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance 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 over seven decades of combined experience aiding Tower Grove, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and ethical imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be honest and unbiased, and we are not bound to only offer you limited investment opportunities.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) experts and financial planners today.
