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 also create uncertainty about the best way to manage your existing 401(k). Many Webster Groves, 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 planners will help you understand your options. For rollover 401(k) counseling in Webster Groves, MO, call us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Webster Groves, MO
Typically, 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 guide you towards what will work best for you. Depending on a variety of factors, we may recommend 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).
Taking out the cash value is not recommended unless you need money now. Your previous employer would be obligated to take out 20% of the savings to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, 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 the balance is 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 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:
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 original value and market value of company stock in your 401(k) plan. 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 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 — rather than income tax, which is often higher.
Pick Your Own Financial Institution
When you opt to put your savings in a 401(k), your employer will decide the 401(k) company holding your funds. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll have your pick of custodians based on stability, trading technology, and financial services.
More Diverse of Investment Options
While some Webster Groves, MO companies provide 401(k) plans that allow for a wide array 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
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you have multiple 401(k) plans with previous employers, 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 track how your savings are growing and you will be able to manage them more directly. It may also be the better option for long-term growth.
Continue Adding Money 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 continue adding more money over time.
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 more than two decades of experience advising both individuals and business owners in Webster Groves, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, for instance which type of savings plan fits best in your portfolio.
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 savings should be left in a 401(k) plan; either your previous employer's or your new one. Some reasons to choose a 401(k) plan over an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and your savings are growing as you'd like them to, 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.
- No early withdrawal penalties if you are 55. While you can begin taking out funds without a fee from either 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 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 note that you cannot take a loan out of an IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Take a look at 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
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 achieve their objectives. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience assisting Webster Groves, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral imperative to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be direct and unbiased, and we are not bound to only offer you limited investment options.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our qualified 401(k) specialists and financial advisors today.
