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[Video] Investing: Consolidate Old Retirement Accounts When It Makes Sense

by Financial Design Studio, Inc. / April 3, 2020

ROBERT STOLL, CFP®, CFA®

[Video] Investing: Consolidate Old Retirement Accounts When It Makes Sense

In today’s economy it is very common for people to change jobs often as they look to advance their career. While there is a lot of benefit from that from a jobs growth standpoint, what can happen often is as you switch jobs, you leave your old 401k savings and old plans with your old employers. This is when we recommend you consolidate old retirement accounts.

 

After a number of years, you might have 5-6 plans and you wonder if you are really on track for retirement or not given you have all these different plans out there. 

So we are going to talk about two things you can do to simplify your retirement life as it relates to this old 401ks and consolidating. 

 

Current Employer 401k Consolidate

 

So your first option is to look at your current employer. If your current employer has a 401k plan and they allow you to bring in your old 401ks, you can just take all these old 401ks and move them right into that plan. 

 

That way, all your retirement money is in one spot. You don’t have to worry about keeping track of all these other accounts. 

 

Rollover IRA Consolidate

 

The second option for what to do with all your old 401ks is to do what is called a Rollover IRA. And what you do there is you open up an IRA with a custodian like Amitrade or Schwab and you instruct your old 401k providers to move that money over to the new IRA.

Now one thing you want to be careful with is you want to make sure that they don’t send you checks from the 401k. If they do that, it could become a taxable event for you. So you want to make sure that if you do move your old 401ks into a Rollover IRA, that they move it directly over and you never touch the money. 

So these are two ways you can simplify your financial life. By consolidating accounts like this, you’ll have a much better grasp of how you are doing with your retirement. You won’t have to manage several different accounts or investment options. 

If you have a question like this or on any other topic, please feel free to reach out to us!

 

Have questions we can answer about the state of the market?

Contact Financial Design Studio, Financial Advisors in Deer Park.

 

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Financial Design Studio, Inc.

We are financial advisors in Deer Park and Barrington, IL. A team with a passion for helping others design a path to financial success — whatever success means for you. Each of our unique insights fit together to create broad expertise, complete roadmaps, and creative solutions. We have seen the power of having a financial plan, and adjusting that plan to life. The result? Freedom from worrying about the future so you can enjoy today.