Rollover 401(k) in Warson Woods, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Warson Woods, MO. Starting a new job in Warson Woods, MO can lead to new opportunities, but it can be hard to know what to do with your existing 401(k). Many Warson Woods, 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) specialists and financial advisors will help you determine what makes the most sense for you. For rollover 401(k) services in Warson Woods, MO, reach out to us today at 314-930-401K or contact us online.
Rollover 401(k) Options in Warson Woods, MO
In general, there are four different things you can do with your 401(k) account with your old employer. A knowledgeable Warson Woods, 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 specific circumstances, 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 is only truly an option if you need funds quickly. Your previous employer will have to take out 20% of the funds for tax purposed. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would would be subject to federal, state, and local taxes. That means you might not even see 50% of the account's value.
One last consideration to mention is that many employers in Warson Woods, 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. 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 increase in value between the original value and market value of company stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can transfer 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 is 0%, 15%, or 20%, depending on your income — rather than income tax, which is often higher.
The Financial Institution of Your Choice
In a 401(k) plan, your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are and the range of services they offer.
More Diverse of Investment Options
While some Warson Woods, MO employers provide 401(k) plans with few limitations on your investment opportunities, 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:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Combine Your 401(k) Plans
If you change jobs frequently, it may make the most sense to incorporate the entirety of your retirement funds into one place. That way, you much much more efficiently track how your investments are performing and managing them will be more streamlined. 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. 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 more than 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, for instance what type of account makes the most sense for your time horizon.
Why Not to Roll Over Your 401(k) into an IRA in Warson Woods, MO
Every person's finances vary, and your Warson Woods, MO retirement planners at Correct Capital may recommend that your investments are better off in a 401(k) account; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan rather than an IRA include:
- If your current 401(k) plan works for you. 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. 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 you can begin taking out funds without a fee from both a 401(k) or IRA at 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you need or want the money sooner.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't advisable, it is important to know that you cannot take a loan out of either a Traditional or Roth 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.
Take a look at some of the other services we offer in Warson Woods, 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 Warson Woods, MO | Correct Capital
At Correct Capital, we give all of our clients personalized attention and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience aiding Warson Woods, 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 obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we will always be straightforward and unbiased, and there are no restrictions to the services or investment options we can offer you.