From
Your Perspective:
Managing your retirement nest egg
Consolidating retirement
accounts
If you’ve worked for different employers — as most people have — you
may have accumulated a number of retirement savings accounts, or a combination
of savings accounts and
pension
accounts. You may want to consider consolidating
your
assets
in a single
IRA,
or at least in as few accounts as you can
arrange. Here’s why:
1.
Keeping track of different retirement accounts means extra paperwork.
2.
There’s always the possibility you’ll lose sight of one or more accounts if you’re trying to keep an eye on too many.
3.
Since you have to compute
the
minimum
required distribution (MRD)
from each account
every year — although you can take the total required
distribution from just one account if you wish — you
could get lost in a sea of numbers.
4.
You’ll probably
reduce the fees you pay if you consolidate your accounts.
Not only will you have a smaller number of annual
maintenance fees, but also, an IRA
provider may eliminate these fees once your account
is large enough — often a minimum of $50,000.
5.
An added bonus of a consolidated IRA is that the larger investment base makes it easier to manage
asset allocation
and
diversification.
You can combine separate retirement savings accounts and existing rollover IRAs into a single rollover IRA. That includes assets in 401(k)s, 403(b)s, 457 plans, SIMPLEs, and certain plans you’ve set up as a small business owner, freelancer, or other self-employed worker.
