I have consolidated everything into Schwab. No more vanguard, cd’s with a bunch of online banks. I’m a bit hesitant about having all my eggs in one basket but …..
My wife and I closed out 2 small inherited IRA’s. We had several mutual funds in the name of diversity in our non retirement account. Over the last several years we have sold all except our muni fund. All the proceeds from the sales went into the muni. Our IRA’s now have only one fund each.
Here are my two biggest: 1) I took my pension as an annuity rather than a lump sum. 2) I left my 401(k) with my former employer.
I will have an ongoing relationship with my old company for the rest of my life as it is the custodian for the bulk of my wealth. I’m sure some would bristle at that, but I have no issue.
Ken – as long as your former employer isn’t hitting you with large fees and the fund selection is reasonable, there’s not a compelling reason to change. My former employer started charging a quarterly fee while I was still working, and often changed available funds, so I rolled my 401(k) into a Schwab IRA. Once you are old enough you may want to transfer to an IRA so you can use QCDs for charitable contributions.
I implemented my company 401k back in 1982 and I had an emotional attachment. Over the years I negotiated with the unions for a higher company match in exchange for all plan expenses being paid by the trust.
After I retired they implemented a new charge on inactive accounts. That meant those retired were paying for expenses of the plan twice. I had enough and transferred to Fidelity just on principle.
Jeff, you make good points. I retired from a large, stable company with very reasonable 401(k) fees and great fund options. I do want to eventually use QCDs so may need to do the IRA rollover someday. Still, that’s over a decade in the future and who knows what the tax laws will be then.
There’s some good reasons to do an IRA rollover, but be aware that you probably forfeit the ERISA protections for whatever protections are afforded IRA’s in your state. For example, in my state an IRA is only protected from legal judgements up to $1,000,000 dollars, while an ERISA protected (ie. qualified) 401K has unlimited protection from legal judgements. Just something to be aware of.
I have too many accounts so I’m in the middle of consolidating:
Inherited money from my parents at multiple companies (strangely enough not at my preferred company which is Vanguard) with both Roth and traditional accounts. Original plan was to continue taking RMDs on their schedule as a homage to them. Recently decided to use solely these funds to pay our obligations (we are retired and delaying SS) in order to decrease the numbers of institutions.
In our accounts converting all of my wife’s traditional IRA to a Roth as her’s is the smaller balance and she has had two members of previous generations who lived to be at least 102 1/2 (her mother is still going).
Finally converting all my equity position into total US stock, or world stock ETFs. Bonds will be approximately evenly split between short term, short term TIPS, and intermediate ETFs.
Having no fixed abode. Said somewhat in jest, but it actually does remove a lot of complexities.
More seriously, not enough. Almost all long term assets (and net worth) are at one brokerage. Yet I’ve actually considered moving some of it to a new account as cybersecurity/fraud protection. Also, it includes several positions we could eliminate but at the cost of incurring capital gains.
I have consolidated everything into Schwab. No more vanguard, cd’s with a bunch of online banks. I’m a bit hesitant about having all my eggs in one basket but …..
My wife and I closed out 2 small inherited IRA’s. We had several mutual funds in the name of diversity in our non retirement account. Over the last several years we have sold all except our muni fund. All the proceeds from the sales went into the muni. Our IRA’s now have only one fund each.
Here are my two biggest:
1) I took my pension as an annuity rather than a lump sum.
2) I left my 401(k) with my former employer.
I will have an ongoing relationship with my old company for the rest of my life as it is the custodian for the bulk of my wealth. I’m sure some would bristle at that, but I have no issue.
Ken – as long as your former employer isn’t hitting you with large fees and the fund selection is reasonable, there’s not a compelling reason to change. My former employer started charging a quarterly fee while I was still working, and often changed available funds, so I rolled my 401(k) into a Schwab IRA. Once you are old enough you may want to transfer to an IRA so you can use QCDs for charitable contributions.
I implemented my company 401k back in 1982 and I had an emotional attachment. Over the years I negotiated with the unions for a higher company match in exchange for all plan expenses being paid by the trust.
After I retired they implemented a new charge on inactive accounts. That meant those retired were paying for expenses of the plan twice. I had enough and transferred to Fidelity just on principle.
Jeff, you make good points. I retired from a large, stable company with very reasonable 401(k) fees and great fund options. I do want to eventually use QCDs so may need to do the IRA rollover someday. Still, that’s over a decade in the future and who knows what the tax laws will be then.
There’s some good reasons to do an IRA rollover, but be aware that you probably forfeit the ERISA protections for whatever protections are afforded IRA’s in your state. For example, in my state an IRA is only protected from legal judgements up to $1,000,000 dollars, while an ERISA protected (ie. qualified) 401K has unlimited protection from legal judgements. Just something to be aware of.
I have too many accounts so I’m in the middle of consolidating:
Inherited money from my parents at multiple companies (strangely enough not at my preferred company which is Vanguard) with both Roth and traditional accounts. Original plan was to continue taking RMDs on their schedule as a homage to them. Recently decided to use solely these funds to pay our obligations (we are retired and delaying SS) in order to decrease the numbers of institutions.
In our accounts converting all of my wife’s traditional IRA to a Roth as her’s is the smaller balance and she has had two members of previous generations who lived to be at least 102 1/2 (her mother is still going).
Finally converting all my equity position into total US stock, or world stock ETFs. Bonds will be approximately evenly split between short term, short term TIPS, and intermediate ETFs.
Having no fixed abode. Said somewhat in jest, but it actually does remove a lot of complexities.
More seriously, not enough. Almost all long term assets (and net worth) are at one brokerage. Yet I’ve actually considered moving some of it to a new account as cybersecurity/fraud protection. Also, it includes several positions we could eliminate but at the cost of incurring capital gains.
I’m leaning towards keeping my current split of retirement funds at vanguard and taxable @ etrade. Largely to diversify risk.
I spent 20 years in cybersecurity, and things are not getting better. Eventually Bad Things Will Happen :-/