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You can consolidate retirement accounts by transferring money from multiple accounts into one established IRA account (or into a new IRA you open). Here are seven reasons to consolidate your IRAs and other retirement accounts.
If you are a serial job changer from age 22 to 65, you could easily accumulate over 20 401K’s in your career!
Rolling over a 401K does not count towards your IRA contribution limits and there are a number of good reasons to consolidate your 401K’s by moving them into a rollover IRA. Beyond that, there are often obscene percentage of 401K asset fees in 401K plans.
If you are one of these people, consolidating your accounts may help you save time and may provide a more comprehensive view of your financial situation.
When you have multiple accounts, it can be more difficult to understand how much money you have and where it is.
As of July 1, 2012, 401K administrators are now required to disclose all fees and the result should be eye opening for everyone. Fees can be as high as 1.9% of assets annually but average about 1.3% for plans with fewer than 100 members, which account for 88% of plans Check out my post with a list of online brokers for a complete list of IRA fees.
Ameriprise Financial Services Inc., and its affiliates do not offer tax or legal advice.
Contribution Limits How much can you contribute to your IRA?
Deduction Limits How much of your IRA contributions can you deduct on your taxes?
If you have savings in an employer-sponsored retirement plan like a pension, 401(k) or 403(b) plan, you have an important decision to make when you change jobs, retire or otherwise become eligible to withdraw money from the plan, including: Determining which accounts to consolidate and handling retirement plan distributions can be complex and requires careful thought and additional advice from your tax and legal advisors.
An Ameriprise financial advisor can help evaluate your own unique situation and provide education and guidance so you can determine if consolidation is the right thing to do.
Consolidating your 401K’s into a rollover IRA has become an absolute necessity. The average duration of employment is typically less than two years.