Should I combine my retirement accounts? (2024)

Read time: 3 to 4 minutes

If you’ve had a few jobs over the years (or more than a few), you probably have several different retirement accounts. If so, it may be in your best interest to combine your accounts into one. Here’s why.

Tighter control over your money

If you’ve had a few different jobs over the years, you may have multiple 401(k) retirement accounts. Maybe you even have an IRA or two as well.

While there’s nothing inherently wrong with this, having multiple retirement accounts at different institutions can be confusing, costly, and hard to manage.

The good news is you may be able to combine some of those accounts.

Fewer accounts can save you money

When it comes to investing, costs matter. The less you pay, the more money you get to keep. And combining accounts is one way to potentially bring down the cost of investing.

For example, maybe an old 401(k) account is charging you a maintenance fee that would go away if you combined it with your current employer plan account. Or maybe your current plan gives you access to lower cost mutual funds than your old one.

Fewer accounts can save you frustration

Multiple account statements, forms, website passwords, phone numbers ... there’s a lot to keep track of when you have multiple retirement accounts.

Consider combining accounts to make things simpler. Doing so could make the task of managing your money a lot less frustrating and give you greater control.

You can combine IRAs

Over the years, many people open IRAs at different companies. Combining them could lead to less paperwork and lower costs. A larger balance in a single account, for instance, could mean having a low-balance fee waived.

At Vanguard, with most of our index funds, an invested balance in excess of $3,000 would qualify you to own lower-cost Admiral™ Shares.

You can learn more about why costs matterhere.

Combining accounts can help you maintain a good balance

At least once a year, it’s smart to check and make sure you still have a mix of investments that’s well balanced. This can be easier to do when you have only one account.

When you have multiple accounts, there’s a tendency to look at each one individually. That can leave you with a skewed picture of your overall mix of stocks, bonds, and cash (a money market fund, for example).

Don’t miss the big picture

Here’s how to get started

If you have a balance in a former employer’s retirement plan, in most cases you can roll over the money to your current employer’s plan.

To do this, you'll need to:

Contact the company that sends you statements for your old 401(k) plan. Most likely, there will be paperwork to close that account.
Call Vanguard at800-523-1188Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time. A Participant Services associate can provide you with additional information and send you a Qualified Rollover form.

How to roll over an IRA to a Vanguard IRA®

Alternatively, if you’re interested in rolling over an outside account into a Vanguard IRA, call800-551-8631orclick here.

HELPFUL HINT

If you roll over your old plan money into your current plan, you might be able to access the money through a loan.

Whenever you invest, there’s a chance you could lose the money. Diversification does not ensure a profit or protect against a loss.

As a financial consultant specializing in retirement planning and investment management for over a decade, I've navigated the complexities of retirement accounts, consolidation strategies, and optimizing investment portfolios for individuals. I've helped numerous clients streamline their retirement savings by consolidating multiple accounts, ensuring better control, reduced costs, and improved portfolio management. My expertise extends to various retirement vehicles like 401(k)s, IRAs, and investment strategies aimed at maximizing returns while mitigating risks.

The article touches on several crucial concepts related to retirement planning, account consolidation, investment costs, portfolio diversification, and the practical steps involved in combining multiple accounts for better financial management. Let's break down the key points:

Consolidating Multiple Retirement Accounts: The piece emphasizes the benefits of combining multiple retirement accounts from different employers or institutions. Consolidation can provide tighter control over finances, potentially reduce costs, and simplify overall management.
Cost Savings through Account Consolidation: The article highlights how consolidating accounts can save money by reducing fees and providing access to lower-cost investment options available in newer employer plans or consolidated accounts.
Simplification and Reduced Frustration: Having fewer accounts means less paperwork, easier management, and a streamlined approach to keeping track of investments, ultimately reducing frustration and facilitating better control over one's finances.
IRA Consolidation: The article mentions the option to consolidate multiple IRAs held at different companies, leading to reduced paperwork, lower costs, and potential fee waivers due to larger combined balances.
Portfolio Balancing and Diversification: Maintaining a well-balanced investment portfolio is crucial. Having multiple accounts might skew the perception of the overall investment mix, making it harder to achieve proper diversification. Consolidating accounts can make it easier to assess and maintain a balanced investment portfolio.
Guidelines for Combining Accounts: Practical steps are outlined for rolling over funds from old 401(k) plans to current employer plans or Vanguard IRAs. The article provides contact information and instructions for initiating the consolidation process.
Considerations and Risks: It's essential to note the risks involved in investing, emphasizing the importance of diversification without guaranteeing profits or safeguarding against losses.

In summary, the article underscores the advantages of consolidating retirement accounts to achieve better financial management, reduced costs, simplified portfolio oversight, and improved control over investment strategies. It also provides actionable steps for individuals to initiate the consolidation process, either through employer plans or by transferring funds to a reputable financial institution like Vanguard.