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Carla Fried: Too many retirement accounts? How to get organized

Carla Fried, on

Published in Home and Consumer News

If you’re approaching retirement, chances are you’ve had more than a few job changes. A government report tracking baby boomers (born 1946 to 1964) estimates they hopped jobs an average of 12 times before hitting their mid 50s.

Orphaned 401(k)s

Even if you changed jobs half as much, you likely have a few 401(k) accounts you left behind. Research from Capitalize estimates there are more than 24 million orphaned 401(k) accounts, with an average balance of $55,000. In aggregate, it estimates there’s nearly $1.35 trillion parked in accounts at former employers.

Perhaps you left a 401(k) behind out of benign neglect. Life was busy and you knew it was money that would stay invested for your retirement, so you didn’t think much about it. Or perhaps you made a conscious decision that you wanted to leave the money behind because you thought the plan was solid.

Whatever your reasons, as retirement nears you should think about moving your straggler 401(k)s under one roof. It’s going to make things a whole lot easier once you start to take money from the accounts.

Consolidating your 401(k)s


Once you leave a job, for any reason, you are allowed to move your 401(k) account to another retirement account. This is called a 401(k) rollover.

If you have multiple 401(k)s, you can roll over each one into an individual retirement account you have at a brokerage, such as Fidelity, Schwab, TD Ameritrade and Vanguard. (If you don’t have an account, the firms are eager to get you set up.)

Simplifying your financial life in retirement

For starters, it’s easier to make sure you have the right mix of stocks and bonds when all the accounts are in one place. Every time you log into an online account, you can get a quick, free pie chart based on your current mix. There’s also plenty of advice (some free, some premium) on how to build the right mix for your next stage: living in retirement.


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