Rollover 401(k) in University City, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in University City, MO. While moving to a new job can be a welcome change, it can also lead to uncertainty about the best way to handle the savings you have in your existing 401(k). Many University City, MO residents have found that enlisting the services of qualified financial advisors is the best way to go about handling 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) consulting in University City, MO, call us today at 314-930-401K or contact us online.
Rollover 401(k) Options in University City, MO
In general, you have four options when considering whether to roll over your 401(k). A qualified University City, MO financial advisor like those at Correct Capital will consider 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 advise to:
- Leave the funds 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).
Cashing out is not advisable unless you need money now. Your previous employer would be obligated to withhold 20% of the funds 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 lose the majority of the funds.
One last consideration to note is that employers in University City, MO are allowed to make you move the money if your account 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 University City, MO
Your University City, MO financial advisors at Correct Capital may recommend 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 original value and current value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can transfer that difference into a standard brokerage account, and roll the rest of your 401(k) savings 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 — instead of income tax, which is often higher.
Pick Your Own Custodian
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 institution based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Range of Investment Opportunities
While some University City, MO companies offer 401(k) plans that allow for a wide range of 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 401(k) Plans
If you have several 401(k) plans spread across multiple former employers, it could be incredibly helpful to merge the funds from all your accounts into one account. That way, you much much more efficiently follow how your savings are performing and managing them will be more streamlined. 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. 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 over 20 years of experience advising both individuals and business owners in University City, MO with numerous 401(k) services. When you hire Correct Capital, we'll walk you through important considerations, for instance required minimum distribution model makes the most sense for you.
When to Avoid a 401(k) Rollover in University City, MO
Each of our client's financial situation is unique, and your University City, MO retirement planners at Correct Capital may advise that your funds are better off in a 401(k) account; either your previous employer's or your new one. Some of the advantages of a 401(k) plan rather than an IRA are:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and you're getting strong returns, it may be your best option to keep your savings where they are. If the account stops performing or you change your mind for another reason, you can still roll over your 401(k) at any time.
- Avoid 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're considering early retirement.
- 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 know that you cannot take a loan out of an 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 University City, MO:
- 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 University City, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over 75 years of combined experience assisting University City, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral obligation to oversee your account in a way that benefits you and only you. As an independent firm, we are free to be honest and objective, and we are not bound to only offer you limited investment opportunities.