Rollover 401(k) in Warson Woods, MO
Rollover 401(k) in Warson Woods, MO. Starting a new job in Warson Woods, MO can lead to new opportunities, but it can also create confusion about the best way to manage the savings you have in your existing 401(k). Many Warson Woods, MO residents have found that seeking the help of professional financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial planners will help you understand your options. For rollover 401(k) consulting in Warson Woods, MO, reach out to us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Warson Woods, MO
In general, you have four options when considering whether to roll over your 401(k). A qualified Warson Woods, MO financial advisor like those at Correct Capital will consider your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on your current financial health and your time horizon, it may be best to:
- Leave the savings in your former employer's 401(k) plan;
- 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).
The last option is not advisable unless you need money now. Your previous employer would be required to take out 20% of the savings to prepay the taxes you would owe on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to mention that businesses in Warson Woods, 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 Warson Woods, MO
Your Warson Woods, MO financial advisors at Correct Capital may suggest 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 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 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 is 0%, 15%, or 20%, depending on your income — rather than income tax, which may be considerably more.
The Financial Institution of Your Choice
In a 401(k) plan, 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, the ease of their digital platforms, and the other services they offer.
More of Investment Options
While some Warson Woods, MO employers offer 401(k) plans that include a wide range of investment options, you will generally have much more control over an IRA than you would in a 401(k) plan. 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 multiple 401(k) plans with previous employers, it could be incredibly helpful to incorporate the entirety of your retirement funds into one place. In doing so, it won't be nearly as much of a hassle to track how your savings are growing and managing them will be more streamlined. It may also be the better option for long-term growth.
Keep Contributing to Your Accounts
While you will still see return on your investments 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 understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over 20 years of experience assisting both individuals and families and business owners in Warson Woods, 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 to Avoid a 401(k) Rollover in Warson Woods, MO
Every person's finances vary, and your Warson Woods, MO retirement planners at Correct Capital may recommend that your funds should be left 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 include:
- If you like the benefits of your current 401(k) plan. If the fees aren't too high and your savings are growing as you'd like them to, there may not be a great reason to roll over your 401(k). If the account stops giving you strong returns or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- No early withdrawal penalties if you are 55. While you can begin taking out savings without a fee from both 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. So, a 401(k) may be preferable if you would like to retire a few years early.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, 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) plan. 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 stick with a 401(k) to receive an employer match and keep your retirement assets in one place.
Click on the links below to see some of the other services we offer in Warson Woods, 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 Warson Woods, 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 nearly a century of combined experience helping Warson Woods, MO individuals and families with 401(k) rollovers along with many other wealth management services. As fiduciary advisors, we are legally and ethically required to act only in your best interested. As an independent firm, we are free to be straightforward and unbiased, and we are not bound to only offer you limited investment options.
Give us a call today at 314-930-401K or contact us online to schedule an appointment with one of our knowledgeable 401(k) experts and financial advisors today.
