Rollover 401(k) in University City, MO
Rollover 401(k) in University City, MO. Moving to a new job in University City, MO is exciting, but it can be hard to know what to do with your existing 401(k). Many University City, MO residents have found that enlisting the services of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated team of 401(k) experts and financial advisors will help you determine what makes the most sense for you. For rollover 401(k) counseling in University City, MO, give us a call at 877-930-4015 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 knowledgeable University City, MO financial advisor like those at Correct Capital will consider your finances and guide you towards your preferred option. 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).
The last option is not advisable unless you need money now. Your previous employer would be obligated to take out 20% of the funds for tax purposed. Depending on how close you are to retirement, the IRS may also take a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could potentially lose more than 50% of the account's value.
One last consideration to note is that companies in University City, MO are allowed to make you move the money if your account has less than $5,000 in it. Additionally, you may be required to cash out your plan if it has less than $1,000.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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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:
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 cost basis and current 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 transfer that increase in value into a standard brokerage account, and roll the other funds to an IRA. By separating your 401(k) into two accounts, 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 may be considerably more.
Pick Your Own Financial Institution
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More Diverse of Investment Opportunities
While some University City, MO employers provide 401(k) plans that permit a wide range of investment options, most retirement planners find that IRAs offer more control and flexibility than employer-limited 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, there are many advantages to merging the entirety of your retirement funds into one account. That way, you much much more efficiently follow how your investments are growing and you will be able to manage them more directly. Sustained long-term growth may also be more attainable.
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 may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over two decades of experience helping both individuals and families and business owners in University City, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
Why Not to Roll Over Your 401(k) into an IRA 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 investments are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees aren't too high 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 fees if you are 55. While both 401(k)s and IRAs allow for 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. So, a 401(k) may be preferable if you would like to retire a few years early.
- You cannot take a loan out of an IRA. While taking a loan from retirement savings isn't recommended, it is important to note that you cannot take a loan out of either a Traditional or Roth IRA.
- 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) your employer will match your contributions.
Take a look at some of the other services we offer in University City, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
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 aiding University City, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically bound to oversee your account in a way that benefits you and only you. As an independent firm, we will always be straightforward and unbiased, and there are no limitations to the services or investment opportunities we can offer you.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and retirement planners today.
