Rollover 401(k) in Wentzville, MO
Rollover 401(k) in Wentzville, MO. While moving to a new job can be a welcome change, it can also create confusion about the best way to manage your existing 401(k). Many Wentzville, MO residents have found that seeking the help 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) experts and retirement planners will help you get the most out of your savings. For rollover 401(k) consulting in Wentzville, MO, call us today at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Wentzville, MO
Typically, there are four different things you can do with your 401(k) account with your old employer. A knowledgeable Wentzville, MO financial advisor like those at Correct Capital will be able to look at your finances and guide you towards what will work 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 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 not advisable unless you need money now. Your previous employer will have to withhold 20% of the balance in order to pay taxes on it. 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 the funds.
It is important to mention 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, they may be able to cash out your account if it has less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Wentzville, MO
Your Wentzville, MO financial advisors at Correct Capital may advise rolling over your 401(k) into an Individual Retirement Account (IRA). This is beneficial for several different reasons:
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 cost basis 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 put that increase in value 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 caps out at 20% for the highest earners — rather than income tax, which is often higher.
Pick Your Own Financial Institution
In a 401(k) plan, you will not have any control over the 401(k) company that holds your savings. By rolling over to an IRA, you'll be able to choose your preferred custodian based on stability, trading technology, and financial services.
A Wider Range of Investment Options
While some Wentzville, MO employers provide 401(k) plans that allow for a wide range of investment options, IRAs typically offer an individual investor many more options than 401(k) plans. In an IRA, you can invest in any number of assets, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you change jobs frequently, it may make the most sense to incorporate all of your savings into one place. In doing so, it won't be nearly as much of a hassle to track how your savings are performing 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 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 will be able to supplement your savings.
The financial advisors of Correct Capital will help you determine if a 401(k) rollover is the best option for you. We have more than 20 years of experience helping both individuals and families and business owners in Wentzville, MO with A-Z 401(k) services. When you meet with us, we'll help you navigate important considerations, for instance how a 401(k) rollover will affect your tax planning.
Why Not to Roll Over Your 401(k) into an IRA in Wentzville, MO
Each of our client's financial situation is unique, and your Wentzville, MO retirement planners at Correct Capital may recommend that your funds are better off in a 401(k) account; either your previous employer's or your new one. Some reasons to choose a 401(k) plan rather than an IRA include:
- If you like the benefits of your current 401(k) plan. If the fees are reasonable and you're getting strong returns, it may be advisable to keep your savings where they are. If the account stops performing or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out funds without a penalty from either 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 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 an IRA.
- Your employer can pay matching contributions into your 401(k) plan. While some employers will allow you to roll money out of your 401(k) to an IRA while you are still working, it may make more sense to stick with a 401(k) your employer will match your contributions.
Check out some of the other services we offer in Wentzville, MO:
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 health, goals, 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 in addition to several other wealth management services. As fiduciary advisors, we have a legal and moral obligation to do what's best for you and disclose any potential conflicts of interest. As an independent firm, we are free to be straightforward and unbiased, 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) experts and financial advisors today.
