Do You Have Multiple Retirement Plans? How to Consolidate and Maximize Returns

By Jeff Gilbert

Forward-thinking people have been saving for retirement since day one on the job. So it’s not uncommon to have multiple retirement accounts—both from previous employers and plans set up individually. Does this apply to you? Even if you haven’t given them much thought, those accounts could cause headaches down the road as you find yourself juggling various investment decisions, fee breakdowns, and rules for each.

Before you stress, be aware that there is a way to streamline the management of your retirement savings and possibly maximize your returns: account consolidation. Let’s discuss how it works and why it may be a good option for you.

Understanding Your Options When Consolidating

Different retirement plans have their own benefits, but also their own sets of rules. It’s important to first get an understanding of the rollover options available to you. You may or may not be able to roll some types of accounts into others; some accounts only allow rollovers once every 12 months; and some only let you roll over after two years. (1)

Is Consolidating Right for You?

How do you know if it’s time to consolidate? There are a few things you’ll want to consider before consolidating multiple retirement accounts.

  • What kind of benefits and features do your retirement accounts offer?
  • Are there similar investment options in all of your accounts? 
  • What are the fees like on each of your accounts?
  • Can you roll over previous plans to a new employer? Or do you need to move to a self-directed retirement account?

You’ll want to do your research to answer these questions before you make any moves. And remember, you don’t necessarily need to consolidate everything into one. You can merge some while keeping others open. What’s best for you will depend on your specific situation and goals for retirement.

Benefits of Consolidating Multiple Retirement Plans

When it comes time for retirement, there are several benefits of consolidating multiple plans into one account. 

Here are just a few benefits to consider:

  • Reduced investment fees: Fewer retirement accounts can also mean fewer fees. Instead of paying fees for each of your account management services, you only need to pay one—meaning more of your money can grow.
  • More opportunities to save: You can’t contribute to an old employer-sponsored 401(k). You need to roll over the account to a new 401(k) or a self-directed account so you can continue contributing to that retirement fund. 
  • Reduced administrative work for you: Fewer accounts means simpler management. You don’t need to worry about managing investments and documentation across different platforms. For example, instead of three different monthly statements, you just have one. You can see all your investments in one location for more cohesive planning.
  • Simpler portfolio rebalancing: When it comes time to rebalance your portfolio, having all your accounts consolidated makes it easier to calculate your asset allocations.
  • Easier calculations and withdrawals of required minimum distributions: If you have multiple 401(k)s at retirement, you need to take required minimum distributions (RMDs) from each of those accounts. (2) When juggling multiple accounts, you risk missing a required minimum distribution, for which the IRS can make you pay a penalty. Having a single account makes RMDs much easier. 
  • A clear picture of your money: Consolidating your accounts allows you to clearly understand how well your investments are working for you while enabling you to easily tweak the account to meet your retirement goals.

Lastly, one of the biggest benefits of consolidation is saving time. Time is one of your most valuable assets. Having one consolidated account means you’ll spend less time managing all your accounts and free up more time and energy for doing what you love. 

We Can Help You Consolidate and Maximize

Consolidating your accounts can mean greater returns and less headache in the future, but it can be challenging to navigate the process. If you have multiple retirement plans, Balboa Wealth Partners is here to help. Our ultimate goal is to be your advocate to help you make decisions and achieve your financial goals while tackling life’s challenges. 

Let’s review your overall financial plan and discuss how we can help maximize your returns. To get started and see if we’d be a good fit, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com. Or reach our Scottsdale office at 480-801-5100, info@balboawealth.com to set up a complimentary get-acquainted meeting!

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With more than three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

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(1) https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

(2) https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions