The average household is juggling no fewer than eight different retirement savings accounts, according to a recent survey. Many investors are looking to simplify their lives by consolidating at least some of those accounts. And nearly three-quarters of them consult with a financial advisor rather than seeking information from their employer, a fund provider or another source.
So what should you do if you have two, three or more retirement accounts? First you have to keep in mind the rules about rolling or transferring retirement accounts to avoid paying taxes.
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“An existing relationship, lower fees and good product selection are the three top factors driving IRA rollover decisions for retirees and pre-retirees,” says the website. So, for example, advisors helping a retired client decide what to do with a lifetime’s worth of 401(k) plan assets — scattered over three or four accounts — should probably pick a fund company with which the client has already had a positive experience. Millionaire investors care even more about prior relationships than the less affluent, according to the research. But they’re less swayed by a famous name. Among survey respondents with less than $1 million to invest, 28% said they’d choose a firm with a well-known “retirement brand” when rolling assets over. Among millionaires, only 19% said brand is a priority.
Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.