401(k) Rollover Services

There are a number of reasons why you may be exploring the idea of a 401(k) rollover, but regardless of why you are considering your 401(k) options, it is wise to proceed carefully. Your 401(k) will be your financial lifeline when you reach retirement age, so you want to make sure that it is properly handled and distributed. Keep in mind that once the 401(k) rollover is complete the money will still need to be managed, and how it is managed will heavily be determined by where it is placed.

Confused? Don't worry, OWL Private Wealth Advisors is here for you. We know that everyone has a different financial portfolio and different retirement goals, which is why we offer personalized retirement guidance and advice to all of our clients. Whether you are changing jobs or retiring from the workforce, we can help guide you through the intricate process of navigating a 401(k) rollover to an IRA.

A 401(k) rollover is when funds that were accrued from an employer-sponsored retirement plan are moved to an Individual Retirement Account or IRA. Currently, around one-third of all retirement assets in the US are kept in an IRA, and out of these over half were created via a rollover 401(k) to an IRA. Therefore, if you are considering a 401(k) rollover you are in good company. However, you have several 401(k) rollover options in front of you, so it is wise to seek guidance before making a move.

There are many IRA providers and many different ways to distribute your IRA once the 401(k) rollover to an IRA is complete. Some IRA rollovers take longer than others, so if time is of the essence you want to make the right choice. OWL Private Wealth Advisors has a great deal of experience with 401(k) rollovers and we provide 401(k) rollover services to help guide our clients through their options.

There are several reasons that you might decide to rollover your 401(k) to an IRA. Most people choose to look at an IRA rollover when they are thinking of changing jobs and want to preserve their pre-tax employee-sponsored 401(k). By choosing to rollover your 401(k) to an IRA you avoid paying tax on retirement funds you do not need to access yet and also avoid paying any penalties that might be assessed for cashing out your retirement savings early.

The other reason most people choose to rollover their 401(k) is upon retirement if they are not ready to start drawing a pension from it. In this case, the IRA is a safe place to continue to invest retirement funds pre-tax. In both situations, the 401(k) rollover rules only grant a 60-day window following the date you leave the workplace to act, or the funds will become subject to taxes, fees, and penalties.

The most popular question we hear is whether or not a client should rollover their 401(k). While we cannot make that decision for you, OWL Private Wealth Advisors can assess your current financial situation and offer you professional advice to help guide your decision. If you don't rollover your 401(k) to an IRA you will be subject to fees and penalties and in addition will need to pay income tax which will reduce the lump sum you receive.

The good news for high earners is that there are no limits on IRA contributions if they originate from a 401(k) rollover. Therefore, you can rollover any amount from an employee-sponsored 401(k) and store it in an IRA account. Whether you have $100,000 or $1,000 in your 401(k), a 401(k) rollover is always an option. However, it should be noted that a 401(k) can only be rolled over to an IRA once every 12-month period. Therefore, you cannot partially start an IRA rollover and then a month later decide to move the remaining portion of your 401(k). Thus, this is not a decision that should be made in haste.

That said, there are a few 401(k) rollover rules that savvy retirement investors should be aware of. As mentioned briefly, following retirement or a change in job, an individual only has 60 days to act otherwise they will be subject to tax and fees. In addition, even if a person chooses to retire early if they are under the age of 59, they will need to pay penalties on their 401(k) which is why 401(k) rollover options may be the better option until the individual reaches 60.

Investors should also be aware of Regulation Best Interest (Reg BI) which is designed to protect potential conflict of interests for investors and the advisors they chose to work with. Some potential items to review when considering leaving funds in your 401(k) plan versus a rollover are the potential tax saving options to those who separate from service in the year they turn 55 if they choose to keep their funds in the plan in lieu of a rollover. Internal investment expenses may be lower within your employer plan and investors may benefit from enhanced creditor protection in certain situations. Therefore, each investor needs to evaluate all of their options to determine the best path forward.

Unsure if a 401(k) rollover to an IRA is the best financial move for you? Need help deciding how to manage your IRA once the rollover is complete? OWL Private Wealth Advisors is ready to offer you a personalized financial solution designed to guide you through this milestone moment in your financial journey.