TRANSCRIPT:
Hi, I’m Kyle Howell, a financial advisor at Base Wealth Management. My goal is to guide individuals and families as they make informed decisions about their financial futures. Today, I wanted to share a tip that could potentially help you save on taxes if you’re considering rolling over your 401k.
One important factor to consider before rolling over your 401k is whether you have company stock within the account. Many people are unaware of a tax strategy known as net unrealized appreciation, if your company’s stock has significantly appreciated, you might be able to save on taxes by transferring that stock to a brokerage account instead of rolling it over to an IRA. Here’s how it works. When you transfer the stock, you would pay taxes on the original purchase price at your current income tax rate.
However, any gains on that company’s stock would typically be taxed at the capital gains tax rate, which is often lower. If you’re not aware of this strategy and you roll over the entire 401k into an IRA, you might miss out on this potential tax saving opportunity. I hope this tip provides some helpful insight into managing your retirement savings. If you found this information useful, consider subscribing for more financial tips and strategies. Thanks for watching.
