As more employers automatically enroll workers into k plans — perhaps without employees even being aware or paying much attention — chances are a greater share of workers will forget about their accounts and leave them behind. Workers who leave a job and fail to update any new contact information, such as an address and e-mail, with a former employer would likely not receive communications about the retirement plan. Plus, current law allows businesses to move small, old accounts out of their k plan — increasing the chances savers will lose track of their money.
Yet, savers should be diligent about combining their accounts. More often than not, merging k plan accounts or IRAs makes sense both for financial and behavioral reasons, according to retirement experts. One of the main benefits of merging retirement savings into one stockpile — or, as few accounts as possible — is behavioral: It reduces an investor's oversight obligations. Take, for example, the act of rebalancing an investment portfolio, an exercise financial advisers typically recommend doing at least annually.
With multiple stashes of retirement money, investors would have to tally up positions across all those accounts and then adjust each for an optimal allocation to stocks, bonds, etc.
The mandatory withdrawals investors have to take from retirement accounts after age 72 is also much simpler with one nest egg. The rules around these withdrawals, called required minimum distributions, are different for k plans and IRAs. Typically, you can download the documents, pick them up from the bank or brokerage, or ask to have them mailed. Fill out the form, sign and date it. Submit the form to the trustee. Ask the trustee to cut a check for the balance.
You can pick up the check or have it mailed to your address. Deposit the check in the receiving IRA within 60 days of obtaining it. If you are moving the funds from a traditional IRA to a Roth, the amount is taxable. Laverne O'Neal, an Ivy League graduate, published her first article in A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday.
O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.
Popular Courses. Retirement Planning IRA. Married couples cannot share an account. Advisor Insight Theodore E. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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