Rollover 401(k) in Wentzville, MO
Rollover 401(k) in Wentzville, MO. Starting a new job in Wentzville, MO is exciting, but it can also create uncertainty about the best way to manage your 401(k) account with your previous employer. Many Wentzville, MO residents have found that enlisting the services of professional financial advisors is the best way to go about handling 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) counseling in Wentzville, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Wentzville, MO
Generally speaking, there are four ways to approach your 401(k) rollover. A knowledgeable Wentzville, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards what will work best for you. Depending on a variety of factors, we may recommend 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 should only be considered if you need funds quickly. Your previous employer will have to take out 20% of the savings for tax purposed. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of your savings.
Another thing to note is that many employers in Wentzville, MO obligate you to move the funds in your 401(k) if your account has less than $5,000 in it. Additionally, you may be required to cash out your plan if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Wentzville, MO
Your Wentzville, 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. There are a variety of advantages 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 difference 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 increase in value 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 the shares — which caps out at 20% for the highest earners — rather than income tax, which is often higher.
The Financial Institution of Your Choice
When you opt to put your retirement funds 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 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 Diverse of Investment Opportunities
While some Wentzville, MO employers offer 401(k) plans with few limitations on your investment opportunities, 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
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, it could be incredibly helpful to incorporate the entirety of your retirement funds into one plan. That will make it easier to follow the growth of your funds 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. If you roll the funds out of your old employer's plan, you may be eligible to keep contributing to the plan you've picked out.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have more than 20 years of experience assisting both individuals and families and business owners in Wentzville, MO with a variety of 401(k) services. When you retain our services, we'll help you navigate important considerations, for instance how a 401(k) rollover will affect your tax planning.
When to Avoid a 401(k) Rollover in Wentzville, MO
Depending on your time horizon and other factors your Wentzville, MO retirement planners at Correct Capital may recommend that your funds are best kept 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 rather than an IRA are:
- 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). If the account stops giving you strong returns or you change your mind for another 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 funds without a penalty from both a 401(k) or IRA at 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 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 advisable, if you are in a situation where you need to take out a loan from your retirement savings, you would only be able to do so if they are in a 401(k) plan.
- 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.
Click on the links below to see some of the other services we offer in Wentzville, 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
Rollover 401(k) in Wentzville, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke attention and cater our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience helping Wentzville, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interested. As an independent firm, we will always be direct and unbiased, and there are no limitations to the services or investment opportunities we can offer you.
Give us a call today at 877-930-4015 or contact us online to schedule an appointment with one of our professional 401(k) specialists and retirement consultants today.
