7 Tips for Handling Multiple Retirement Accounts

ajlopez30 Blogger



When I left my first “real job” in 2001, I didn’t think twice about rolling my previous 401(k) plan into my new employer’s retirement plan. The primary reason: I didn’t want the hassle of trying to keep track of two accounts.


(Of course, this is coming from someone who juggles five fantasy football teams and fills out a half-dozen NCAA brackets every year, so go figure.)


The next time I changed employers in 2009, I kept my 401(k) assets where they were and started contributing to a new account, being sure to take full advantage of the employer match.


For those keeping score at home, that’s two job changes and two contrasting approaches to my rollover decision. Why the flip-flop? I appreciate the low expenses associated with my old 401(k), and I’m able to receive a nice employer match by contributing to my current workplace retirement plan.


Point being … there’s no right or wrong answer when it comes to managing multiple retirement accounts. But there are fundamental things to consider when deciding whether to consolidate your money into your current employer’s plan or roll the money into an individual retirement account (IRA) – or just leave it where it is.


And if you haven’t had to face that decision yet, just wait. The Bureau of Labor Statistics found that Baby Boomers changed jobs an average 11.7 times over the course of 35 years. Given the transient nature of today’s job market, I wouldn’t be surprised to see Gen-Xers and Millennials follow suit.


Whether you’re on your first job or 10th, here are seven things to consider when weighing the pros and cons of rolling over your retirement plan into an IRA or maintaining multiple accounts:


  1. Investment options. In general, IRAs provide more options, but some larger employer-sponsored plans offer access to hundreds of investment selections.
  2. Costs and fees. Depending on the size of your employer, your 401(k) fees might be lower than an IRA. That’s because larger companies and organizations have more leverage when negotiating costs with plan providers.
  3. Protection from lawsuits. Assets in 401(k) or other employer-sponsored retirement plans are off limits if you’re sued for damages in a civil case. The protections for IRAs vary from state to state.
  4. Required minimum distributions (RMDs). The IRS requires you to start taking money from tax-deferred retirement accounts when you turn 70½. RMDs do not apply to current employer-sponsored plans as long as you’re still working and contributing to the plan – and you don’t own more than 5% of the business.
  5. Access to loans. Some workplace plans allow you to borrow up to $50,000 from your 401(k). Loans are not available with an IRA.
  6. Early retirement. If you’re between the ages of 55 and 59, you can access your 401(k) without penalty if you are fired, laid off, or quit your job. With an IRA, you can’t access the money penalty-free until you turn 59½.
  7. The value of simplicity. Consolidating multiple retirement accounts into an IRA or your current employer-sponsored plan can make it a lot easier to organize your retirement assets and assess how you’ll pay the bills when you stop working full time.


This list can provide a good foundation, but everyone’s situation is different. If you’ve had to juggle multiple retirement accounts, we’d love to hear from you. Also be sure to check out our Knowledge Place article on the subject.


Review the fees and expenses you pay, including any charges associated with transferring your account, to see if consolidating your accounts could help reduce your costs. Be sure to consider whether such a transfer changes any features or benefits that may be important to you.


Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice.  Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.