Rollover 401(k) in University City, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in University City, MO. Starting a new job in University City, MO is exciting, but it can also lead to confusion about the best way to handle the savings you have in your 401(k) account with your previous employer. Many University City, MO 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 financial advisors will help you understand your options. For rollover 401(k) counseling in University City, MO, call us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in University City, MO
In general, you have four options when considering whether to roll over your 401(k). A knowledgeable University City, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and guide you towards what will work best for you. Depending on your current financial health and your time horizon, it may be best 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;
- Take the cash value out of your 401(k).
Taking out the cash value should only be considered if you need funds quickly. Your previous employer will have to withhold 20% of the balance 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. Meaning, you could potentially lose more than half of the account's value.
It is important to mention that many companies in University City, MO obligate you to roll over the funds to an IRA or new 401(k) if your account has less than $5,000 in it. Additionally, 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 University City, MO
Your University City, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of advantages to this strategy:
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 original value and market value of company stock in your retirement account. 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 rest of your 401(k) savings to an IRA. By separating your 401(k) into two accounts, 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 Financial Institution
In a 401(k) plan, the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll be able to choose your preferred custodian based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some University City, MO companies offer 401(k) plans with few limitations on your investment options, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. In an IRA, you can invest in any number of assets, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded 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 merge the entirety of your retirement funds into one account. In doing so, it won't be nearly as much of a hassle to track the growth of your funds and you will be able to manage them more directly. It may also be the better option for long-term growth.
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. By rolling over the funds into an IRA, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will help you decide if a 401(k) rollover is the best option for you. We have more than two decades of experience helping both individuals and families and business owners in University City, MO with comprehensive 401(k) services. When you meet with us, we'll walk you through important considerations, such as what type of account makes the most sense for your time horizon.
Why Not to Roll Over Your 401(k) into an IRA in University City, MO
Every person's finances vary, and your University City, MO retirement planners at Correct Capital may recommend that your funds are better off in a 401(k) plan; whether that be your previous employer's or your new one. Some reasons to stick with a 401(k) plan rather than 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, 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.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out savings without a fee from either a 401(k) or IRA at 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 need or want the money sooner.
- Loans from an IRA are not allowed. While typically not advisable, if you are in a situation where you need to take out a loan from your retirement savings, it is important to mention that you cannot take a loan out of either a Traditional or Roth IRA.
- 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 stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
See some of the other services we offer in University City, MO:
- 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 University City, MO | Correct Capital
At Correct Capital, we give all of our clients personalized 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 nearly a century of combined experience assisting University City, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and moral obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be honest and unbiased, and we are not bound to only offer you limited investment opportunities.