subject: Simplify Your Retirement Accounts [print this page] Since there are already so many retirement accounts that offer tax advantages (which entice many workers to save up for retirement), a good percentage of retirees may have trouble managing their finances towards a comfortable nest egg. You may have started with a 401K plan in your first job, and added a Roth IRA and an account for your taxable investments, at the very least. You might even have gone deeper into the way you invest by signing up for a new account or plan with another broker, and doubled up your retirement accounts after you get hitched. If you're thinking that you might have too much on your plate, investment- or accounts-wise, you might mess up the rest of your retirement plans. Here are some ways you can reduce the hassle, and hopefully, make your retirement funds more organized and stable:
Many working people have numerous IRAs with different brokers, or multiple 401Ks from a series of employers. Just get one IRA with one broker, for example - one account for each specific plan.
Use one company if you and your partner have numerous retirement accounts. You'll be able to manage all accounts better under a single log-in.
Although diversity is good for many portfolios, over-diversification isn't. If you invest under various accounts for similar funds, you'll be working more than you should. Do some research and choose a viable fund. Don't purchase several index funds even if you've got the same number of investment accounts.
Take a step back and look at all the accounts you have as a whole. If it fits your strategies for diversifying your portfolio, you can have the entire balance of your Roth IRA in one stock or fund, for example. Just make sure your retirement portfolio is diversified - you can buy one fund in each account if so.
In your zeal to protect your investments against inflation and the fluctuation of the market, you might have gone overboard and over-diversified. You could also have a collection of 401Ks or more accounts than you can possibly handle. In these cases, you might overlook some investments or mismanage some accounts. For professional help in simplifying your retirement accounts for a stronger nest egg, talk to your financial advisor or investment planner.
by: Carina Smith
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