EGTRRA, which became effective for tax years beginning 2002, changed the rules to allow retirement account owners to move assets between regular (non-conduit) Traditional IRAs, 403(b) accounts, 457(b) accounts and qualified plans.Many retirement account owners are now considering the allowable benefits of combining their retirement accounts.
It is not unusual for someone who is making his or her annual contribution to open a new IRA each year with a different custodian.All deductible and non-deductible traditional IRAs can be combined. You cannot consolidate funds from a Roth IRA with a traditional IRA. Consolidating your retirement accounts into a single account makes it easier to manage your asset allocation and avoid costly mistakes. Consolidation makes sense to all who want to benefit from a more simple and efficient process of managing their account.Having one account makes it easier to re-balance your holdings as the markets shift, keeps your paperwork centralized, lowers your overall fees, helps to create better service as you now have a “super-account” and makes it easier for you to calculate the required minimum distributions (RMD). It helps your loved ones to locate your savings faster. Create a list of all your retirement accounts including their current balance, their performance, their fees and the type (401K, IRA, Roth-IRA, SEP-IRA, etc). Figure out your retirement needs and goals (estate planning, cash flow, capital preservation, etc.) 3. You will have only one statement to deal with, your fees will be lower, and you will be able to allocate and/or re-balance your accounts easier, one simple calculation for your RMD.Many people do not realize that these funds can be rolled over to an existing IRA.Since company plans typically offer only a limited number of investment options, by rolling over you can increase your investment selection while reducing the number of accounts. Having multiple retirement accounts may cause you to have duplication in your portfolio where you may have similar investments with similar objectives.Make it simpler for financial specialists to stay up to date too.