Rollover 401(k) in Wildwood, MO
Rollover 401(k) in Wildwood, MO. Moving to a new job in Wildwood, MO can lead to new opportunities, but it can be hard to know what to do with your existing 401(k). Many Wildwood, 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 experienced team of 401(k) experts and financial planners will help you understand your options. For rollover 401(k) advice in Wildwood, MO, reach out to us today at 877-930-4015 or contact us online.
Rollover 401(k) Options in Wildwood, MO
In general, you have four options when considering whether to roll over your 401(k). A professional Wildwood, 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, we may advise to:
- Leave the funds in your former employer's 401(k) plan;
- 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).
Taking out the cash value is not advisable unless you need money now. Your previous employer would be required to withhold 20% of the balance to prepay the taxes you would owe on it. Depending on your age, the IRS may also withhold a 20% early withdrawal penalty, and you would also have to pay federal, state, and local taxes. Meaning, you could potentially lose more than half of the account's value.
It is important to mention that many companies in Wildwood, MO obligate you to move the funds in your 401(k) if your plan has less than $5,000 in it. Lastly, you may be required to cash out your plan if the balance is less than $1,000.
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Benefits to Rolling Over a 401(k) into an IRA in Wildwood, MO
Your Wildwood, 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 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 cost basis and market value of shares of employer stock in your 401(k) plan. If part of your 401(k) includes company stock, you can put that portion of your account into a standard brokerage account, and roll the other funds to an IRA. The advantage of this is that you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be substantially more.
The Custodian of Your Choice
When you opt to put your retirement funds in a 401(k), the money will be held by the 401(k) company your employer chooses. By rolling over to an IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
More of Investment Opportunities
While some Wildwood, MO employers provide 401(k) plans with few limitations on your investment options, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Shares
- Bonds
- Certificates of deposit
- Mutual funds
- Exchange-traded funds
- Real estate investment trusts
- Annuities
Consolidate Your 401(k) Plans
If you have various 401(k) plans with previous employers, it could be incredibly helpful to combine all of your savings into one account. That will make it easier to follow the performance of your funds and you will be able to manage them more efficiently. 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 continue adding more money over time.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have over 20 years of experience helping both individuals and families and business owners in Wildwood, MO with A-Z 401(k) services. When you retain our services, we'll help you navigate important considerations, such as required minimum distribution model makes the most sense for you.
Why to Avoid a 401(k) Rollover in Wildwood, MO
Depending on your time horizon and other factors your Wildwood, MO retirement planners at Correct Capital may advise that your investments are best kept in a 401(k) plan; either your previous employer's or your new one. Some of the advantages of a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees are reasonable and you're getting strong returns, it may make the most sense to keep your savings where they are. the fees change in the future or you change your mind for a different reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal fees if you are 55. While you can begin taking out money 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 taking a loan from retirement savings should only be considered in certain circumstances, 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 full or partial match into a 401(k), while you are the only contributor if you put your savings into an IRA.
Click on the links below to see some of the other services we offer in Wildwood, MO:
Rollover 401(k) in Wildwood, MO | Correct Capital
At Correct Capital, we give all of our clients personalized guidance and tailor our services and advice to their current financial status, goals, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Wildwood, 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 imperative 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 objective, and there are no restrictions to the services or investment opportunities 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 retirement planners today.
