A financial advisor in St. Petersburg can help you decide what to do with a 401(k) when you leave a job, turn your savings into retirement income, and set up a retirement plan for your own business. Holland Capital starts with the plan and then chooses the investments.
Retirement used to be something you were saving for. Now it is close enough that the decisions have started showing up.
The 401(k) may be the largest account you own. Next to it might be an IRA or two, a brokerage account, the house, and cash that has accumulated while you were busy working.
Soon, some of those accounts have to do a different job. Instead of receiving money every two weeks, you will need to decide where the next deposit into your checking account comes from. Before that happens, there may be a 401(k) decision, a Social Security decision, health insurance to cover, and a few final years when you can still save from a paycheck.
We look at those decisions together. Once we know what the money has to do, we decide how to invest it.
The Years Just Before Retirement
Five or ten years from retirement, the questions change.
Your income may be at its highest. You can make larger catch-up contributions to retirement plans once you turn 50. You may be deciding whether to pay down the mortgage, help a child with a first home, or keep saving at full speed.
At the same time, retirement starts needing actual dates. When will you stop working? When will Social Security start? What will cover health insurance before Medicare? Which account will you spend first?
Saving in a Roth account now can lower the tax on withdrawals later. Retiring before 65 can mean paying for health coverage out of savings for a few years. Delaying Social Security means drawing more from the portfolio at first. A decision in one place can change what makes sense somewhere else.
Our retirement income planning guide explains how savings become a paycheck, and retirement planning covers the whole approach.
What to Do with the 401(k) When You Leave
Your last day at work is set, or you can finally see it coming. At some point, the 401(k) that spent years quietly taking money from every paycheck needs a decision.
Someone may already have suggested an annuity.
You usually have four paths: leave the money in the old plan, move it to a new employer’s plan, roll it into an IRA, or cash it out. Cashing out means paying tax on the whole balance at once, so it is rarely the right choice for a large account.
The other three deserve a real comparison. A few details can decide it.
If you leave your job in or after the year you turn 55, withdrawals from that employer’s 401(k) are not hit with the 10 percent early withdrawal penalty. Roll the money into an IRA and you generally lose that exception until 59½.
If the plan holds your employer’s stock, taking the shares out a certain way can lower the tax on their growth. Our guide to net unrealized appreciation explains how.
If someone has offered an annuity for the rollover, read the surrender period, the annual costs and exactly what income it guarantees before you sign. An annuity can fill a real gap in retirement income. It is also hard to undo. A second opinion on an annuity lays out the costs and terms before you commit.
If you roll the account into an IRA that we manage, Holland Capital is paid an advisory fee on it. We tell you that before you decide, and the comparison has to stand on its own. Our 401(k) rollover guide covers the options in more detail.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
If You Run a Small Business and Want to Offer a 401(k)
Maybe an employee has asked about a retirement plan. Maybe a good candidate brought it up in an interview. You may also want to save more for yourself than an IRA allows.
Offering a 401(k) means deciding which type of plan fits the business, whether you will contribute for employees, who handles the paperwork and testing, and what the plan costs.
It also makes you responsible for the plan. As the sponsor, you choose the investments offered and keep an eye on fees, and those duties continue after the plan is set up.
A federal tax credit can offset some of the start-up costs for small employers. We help you choose the design, set it up, and keep it running. Our 401(k) advisory page explains how.
Investing After the Plan Is Set
Once the dates are on the plan, we know which dollars may have to support you first and which ones may not be touched for years.
Money you expect to spend in the first years of retirement has a different job from money you may not need until much later. That lets us build the portfolio around when you are likely to need the money instead of treating every account the same way.
A rollover IRA, a Roth account and a taxable account are taxed differently, so where an investment sits can change what you keep after tax.
We also start with what you already have. A rollover does not mean everything you own needs to be sold and replaced. If an investment still fits the plan, it stays.
Our investment management puts the plan into practice. It does not replace it.
Working with Holland Capital
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
In the first meeting, we want to understand what is changing. If retirement is five years away, the decisions may be different from the ones you face if your last day at work is already on the calendar. If you have a recent 401(k) statement or a letter from the plan, it helps.
From there, we can separate the decisions that need attention now from the ones that can wait.
Your CPA and attorney stay involved. We coordinate with them so the tax return, the documents and the accounts all line up.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Our Florida office is in Winter Park. If you are looking for a financial advisor in St. Petersburg, we can work together without your adviser being down the street. Most meetings are by video or phone. When it makes sense to sit down together, we can meet by appointment at the Regus center in First Central Tower, 360 Central Avenue, in downtown St. Petersburg. Holland Capital does not maintain a branch office in St. Petersburg.
We work with clients throughout Florida. You can see the other Florida communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
How Do I Find a Fiduciary Financial Advisor in St. Petersburg?
Ask directly, and ask for the answer in writing. You want to know whether the adviser acts as a fiduciary for all of the advice it gives you, and how the adviser is paid.
Holland Capital is a fiduciary when it provides investment advice. CFP® professionals also owe a fiduciary duty when they give financial advice.
Should I Roll My 401(k) into an Annuity?
An annuity can make sense for part of the money. Putting all of it into one is a much bigger decision.
An annuity can turn savings into guaranteed income, which helps if Social Security and any pension do not cover your basic expenses. It also ties up the money, often with surrender charges for several years, and some annuities carry high annual costs.
Start with the gap: how much guaranteed income do you actually need? Then compare the annuity with other ways to fill it. If you still want one, we can review the specific contract for a fee. Holland Capital does not sell annuities directly. If you buy one through the outside insurance specialist we work with, Holland Capital may share in the commission, and we tell you before you decide.
What Does a 401(k) Cost a Small Business?
Costs usually come from four places: the recordkeeper, the plan administrator, the investments, and any adviser to the plan. Some are paid by the business and some by the participants’ accounts, depending on how the plan is set up.
Employer contributions and many plan costs are deductible business expenses. Small employers may also qualify for a federal tax credit for start-up costs, which the IRS explains in its guide to the startup costs tax credit.
Photo: Jim Dietrich (EaglesFanInTampa) / Wikimedia Commons / CC BY-SA 3.0, cropped.
