Consolidating multiple 401k accounts

12-Mar-2014 17:37 by 10 Comments

Consolidating multiple 401k accounts - jeux dating gratuit

You then get the 20% back as a tax credit on your year’s return.

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For example, beneficiary updates or address changes can be handled with a single phone call or completing a single form.

Don’t forget, the IRS now requires annual tax returns to include information on whether an RMD was required for each account.

It may be more efficient to consolidate, or rollover, these accounts into a single Individual Retirement Account (IRA).

By Steven W Shirley Are you one of the many Americans who changed employers several times during your career and as a result have several different retirement plans such as IRAs and 401(k)s?

It’s great to sock money away for retirement during your tenure at each job, but there is a downside to having multiple retirement accounts.

Consolidation may help retirement planning since more and more future retirees may depend on IRAs in addition to Social Security and Medicare benefits.

In fact, in a recent survey, 42% of Americans expressed fears related to retirement income, either that they will run out of money prematurely, or that they will have to downgrade their lifestyle in retirement.Tracking and reporting these assets are more complicated and you could be racking up service fees for each account.Plus, miscalculating any Required Minimum Distributions could lead to a 50% penalty tax on the difference of the amount taken and the RMD.The National Association for Variable Annuities “2005 Financial Retirement Fears” survey, March 28, 2005. In addition to saving time and effort, you could also save money by having just one retirement account.If you are paying maintenance or service fees on each account, consolidating into one IRA may help you minimize or eliminate these fees.On the other hand, if you had a single account, you can simplify your record keeping and investment management.