Consolidating 401k ira
Similarly, there are cases of employees having to wait a long time -- sometimes upwards of a year -- to get their 401(k) money after leaving a job.Call me paranoid, but when I weigh the pros and cons of consolidation, I come out in favor of spreading my money around.But if your new employer's plan prohibits rollover money or transfers from other plans, then you're out of luck. And since the new tax law passed in June also allows 401(k)s to accept money from regular IRAs as well as other retirement plans, such as 403(b)s, I suspect that more and more plans will accept transfers. Of course, you do have the right to combine separate IRA accounts, if you hold several.So, for example, if you've switched jobs three times and each time you transferred your 401(k) balance into a new IRA rollover, there's nothing to prevent you from consolidating your three IRA rollovers into one account.In or nearing retirement, everyone should begin to look closely at their funds.
Having accounts in more than one place can make keeping tabs more difficult.
The average American will hold 11 jobs between the ages of 18 and 62, according to the Bureau of Labor Statistics (2010).
When you start a new job, you probably remember to pack your personal items and update your contact information, but do you consider what to do with your 401(k) held at your previous employer? A recent Merrill Edge survey found that nearly half (46 percent) of mass affluent Americans plan to rely solely or heavily on retirement plans offered by their employer for their retirement savings, such as a 401(k) or 403(b).
Rolling over your balances into one account helps to ensure you can properly track and manage your savings to help you pursue your retirement goals.
When it’s simpler to monitor your investments, you can make changes as needed.
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