In today’s world where everything seems to be done online, wouldn’t it be nice to reduce the number of logins you have to keep track of? Consolidating retirement accounts might just do the trick. It might also ensure none of your hard-earned money goes missing. Keep reading to learn more about consolidation, and what to do if you’ve lost track of an old 401(k) account.
The potential benefits of consolidating
Whether it is an old 401(k) from a previous employer, an IRA or ROTH IRA, combining retirement accounts can result in the following benefits:
- Easier Required Minimum Distribution (RMD) tracking and tax preparation.
- Possible lower total fees.
- Simplified finances due to fewer monthly statements (and logins).
- An all-inclusive view of your portfolio and a cohesive investment strategy.
- Less chances of security breaches online or in the mail.
What types of accounts can be consolidated?
For example, if you have a traditional 401(k) from a previous employer and a traditional IRA, these can be combined. If you have an old Roth 401(k) and a Roth IRA, these can be combined, too. In some cases, it might make sense to roll over a small IRA account into your current 401(k) plan.
Other advantages of consolidating
If your income is above the Roth IRA contribution limits yet you’d still like to make Roth contributions, there is a way to make non-deductible IRA contributions and then convert these monies over to a Roth IRA. This process works more smoothly if you don’t have other existing IRA assets; otherwise, you run into the pro-rata rule for distributions down the road.
What if I’ve lost an old 401(k) account?
This article from Charles Schwab is helpful if you’ve lost track of an old 401(k) account at a previous employer.
If you have old or current retirement accounts you might be interested in consolidating, please give us a call to discuss how we can help! We’ll walk you through your options, compare fees you’re currently paying to our fees, and show you which accounts can be combined.
Clicking on the links above may result in you leaving the Pittenger & Anderson, Inc. website. The opinions and ideas expressed on these external websites are those of third-party vendors and Pittenger & Anderson, Inc. has not approved or endorsed any of this third-party content. For the full Terms & Conditions of using the Pittenger & Anderson, Inc. website, click on this link.
Pittenger & Anderson, Inc. does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Additionally, the information presented here is not intended to be a recommendation to buy or sell any specific security. To learn more about our firm and investment approach, check out our Form ADV.
Click here to download the PDF version of this article.
