How to consolidate 401k and retirement accounts

I’m lisa birnbach for howdini calm and we’re going to talk about how to consolidate your retirement accounts with carolyn big de a reporter for money magazine hi carolyn hi why is it important to consolidate your retirement accounts in the first place well a lot of people tend to switch jobs throughout their career and they may leave behind a 401k and they may also

During that time open up a few iras well you may have just a few small sums of money in each of those pots and brokerages tend to charge a fee and annual fee if you have five thousand dollars or less in each of those funds so for one for one reason you want to consolidate them to eliminate those fees secondly it’s a lot easier to keep track of your whole portfolio

If you’ve all got it in one or two places instead of scattered all over the place and then also it’s just it’s probably better to over the long term you have many more investment options if you choose the brokerage fund that you invest with instead of sticking with your your employer’s 401k who may have a limited number of funds to pick from a lot of employees

May think that they are limited by their employer may think that they leave the money when they leave their job and may think that they have to follow some kind of guideline is that is that a myth you don’t have to leave your money with your employer when you leave that job you have the right to go to any brokerage company or fun company that you want they have

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Applications that make it really easy you apply online and what they do is they essentially transfer that money from your employer to the new account that you want the important thing here to remember is not to have that money distributed to you because there are tax implicate acts implications so if you get the money you might have to pay tax on that plus a ten

Percent fee so what you want to do is apply online with these fun companies and have the money directly transfer from one account to the next and and it would seem that your money will grow faster that way anyway won’t it when you have the freedom to select the funds that you want from whichever brokerage or fine company that you go to you can pick funds that

Maybe have lower fees or a better performance history or managers that you like better so that your money could over the long term benefit from being consolidated into one or two accounts so is there a wide range of what could happen if you have a hundred thousand dollars let’s say in a 401k is there is there a wide range of how fast and how much that can grow

Depending on the fund definitely it all depends on the investment style of that fun it depends on how much of it might be invested in stocks or if you’re putting that into bonds and and what type of return you’re getting over the years a big factor also is are the fees that you’re going to be paying your over a year because those will over time take a bite out of

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Your return so you want to have the freedom to pick funds that you think are that are satisfying to you that you think are you know suited to your investment plan carolyn do you think that if somebody is not confident about his or her ability to make those determinations that they should hire a financial advisor sure if you need a little help there are fee-only

Financial planners who will sit down with you for an hour or two and they will go over your investment plan that will go over your portfolio and they will help you make decisions about what which funds or investments are best for you in your goals thank you so much carol invicta from money magazine i’m lisa birnbach for howdini calm you

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How to consolidate 401k and retirement accounts By Howdini