Rollover 401(k) in Webster Groves, MO
Rollover 401(k) in Webster Groves, MO. While moving to a new job can be a welcome new opportunity, it can be hard to know what to do with your 401(k) account with your previous employer. Many Webster Groves, MO residents have found that seeking the help of qualified financial advisors is the best way to manage a 401(k) rollover. At Correct Capital, our dedicated 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 Webster Groves, MO, call us today at 877-930-4015 or contact us online.
How You Can Approach Your Rollover 401(k) in Webster Groves, MO
Typically, there are four different things you can do with your 401(k) plan with your old employer. A knowledgeable Webster Groves, MO financial advisor like those at Correct Capital will consider your finances and help you decide which option is best for you. Depending on a variety of factors, it may be best to:
- Keep your 401(k) with your old employer;
- 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 will have to withhold 20% of the savings 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 lose the majority of the account's value.
One last consideration to note is that employers in Webster Groves, MO are allowed to make you move the money if your account has less than $5,000 in it. Additionally, they may be able to cash out your account if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Webster Groves, MO
Your Webster Groves, MO financial advisors at Correct Capital may recommend rolling over your 401(k) into an Individual Retirement Account (IRA). There are a variety of benefits 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 increase in value between the original value and current value of shares of employer stock in your retirement plan. If part of your 401(k) includes company stock, you can put that difference into a standard brokerage account, and roll the remainder to an IRA. In doing so, you may pay long term capital gains tax on the shares — which is usually 15% but can go up to 20% for people with high-income — instead of income tax, which is often higher.
The Custodian of Your Choice
In a 401(k) plan, you will not have any control over the 401(k) company that holds your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
A Wider Array of Investment Opportunities
While some Webster Groves, MO businesses provide 401(k) plans that permit a wide range of investment options, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Combine Your Savings Accounts
If you have various 401(k) plans with previous employers, it may make the most sense to merge the funds from all your accounts into one plan. In doing so, it won't be nearly as much of a hassle to follow how your savings are growing and managing them will be more streamlined. Sustained long-term growth may also be more attainable.
Keep Contributing 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 continue adding more money over time.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have over two decades of experience assisting both individuals and families and business owners in Webster Groves, MO with comprehensive 401(k) services. When you retain our services, we'll walk you through important considerations, for instance whether a traditional or Roth IRA is best for you.
When to Avoid a 401(k) Rollover in Webster Groves, MO
Each of our client's financial situation is unique, and your Webster Groves, MO retirement planners at Correct Capital may recommend that your investments are better off in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some of the advantages of a 401(k) plan instead of an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees aren't exorbitant and you're getting strong returns, there may not be a good reason to roll over your 401(k). 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.
- No early withdrawal fees if you are 55. While both 401(k)s and IRAs allow for withdrawals when you are 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. So, a 401(k) may be preferable if you would like to retire earlier.
- You cannot take a loan out of an IRA. While typically not recommended, 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 either a Traditional or Roth IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
See some of the other services we offer in Webster Groves, 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 Webster Groves, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention 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 over 75 years of combined experience aiding Webster Groves, MO individuals and families with 401(k) rollovers as part of our all-inclusive wealth management services. As fiduciary advisors, we have a legal and moral imperative to act only in your best interested. As an independent firm, we will always be straightforward and objective, and there are no limitations to the services or investment options we can offer you.
Call us today at 877-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) specialists and financial planners today.
