Rollover 401(k) in Webster Groves, MO
Professional, Honest, and Experienced Retirement Planners and Financial Advisors
Rollover 401(k) in Webster Groves, MO. Moving to a new job in Webster Groves, MO can lead to new opportunities, but it can be hard to know what to do with your existing 401(k). Many Webster Groves, 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 experienced team of 401(k) experts and retirement planners will help you understand your options. For rollover 401(k) consulting in Webster Groves, MO, call us today at 314-930-401K or contact us online.
How You Can Approach Your Rollover 401(k) in Webster Groves, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Webster Groves, MO financial advisor like those at Correct Capital will analyze your financial situation and help you determine which option is 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 your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Cash out your 401(k).
The last option is only truly an option if you need funds quickly. Your previous employer will have to take out 20% of the balance in order to pay taxes on it. Depending on your age, the IRS may also take a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could lose the majority of the funds.
It is important to mention that businesses in Webster Groves, MO are allowed to make you move the money if your account has less than $5,000 in it. Lastly, 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 counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. 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 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 put that difference into a standard brokerage account, and roll the rest of your 401(k) savings to an IRA. This way, you may pay long term capital gains tax on your company stock — which is usually 15% but can go up to 20% for people with high-income — rather than income tax, which may be significantly 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 have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
More of Investment Opportunities
While some Webster Groves, MO businesses provide 401(k) plans that allow for a wide array of investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
Consolidate Your 401(k) Plans
If you change jobs frequently, it could be incredibly helpful to combine the entirety of your retirement funds into one place. In doing so, it won't be nearly as much of a hassle to follow how your savings are performing and you will be able to manage them more directly. You could also see greater long-term gains.
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 may be eligible to keep contributing to the plan you've picked out.
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 helping both individuals and families and business owners in Webster Groves, MO with a variety of 401(k) services. When you hire Correct Capital, we'll guide you through special considerations, such as how a 401(k) rollover will affect your tax planning.
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 advise that your savings are better off in a 401(k) plan; either your an old plan or rolling them over into a new one. Some reasons to stick with 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 too high 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 penalties if you are 55. While you can begin taking out savings without a fee from either a 401(k) or IRA at 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.
- Loans from an IRA are not allowed. 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 mention that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer can put matching contributions into your 401(k) account. 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) 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 Webster Groves, 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 Webster Groves, MO | Correct Capital
At Correct Capital, we treat each client individually and get to know them so we can help them reach their goals. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience assisting Webster Groves, MO individuals and families with 401(k) rollovers along with a host of 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 are free to be honest and objective, and there are no limitations to the services or investment opportunities we can offer you.