OCEAN CITY – Over the years, you have likely acquired a number of
retirement accounts. Now may be the time to streamline your holdings.
Frequent job and career moves are part of the new American workplace. As a
result, over the years a growing number of people have accumulated a disparate
collection of 401(k)s, IRAs and SEP plans.
Holding a variety of accounts often makes it harder to maintain a
consistent asset allocation strategy that is aligned with your goals. It can
also mean that these critical retirement assets may not reflect, as a whole,
your preferred risk tolerance, targeted asset mix and investment horizon. This
becomes even more important as part of a plan to meet your income needs in
It’s worth remembering that neglected accounts often become unbalanced over
time, because normal fluctuations in the relative value of equities and bonds
often shift as holdings outperform or falter, altering your overall allocation.
If you’re still working, you may also want to review your contribution
strategy. So long as you work for a company that sponsors a retirement plan,
you may be eligible to automatically make contributions from your pre-tax
Multiple accounts may also lead to unintended overlap in holdings as well
as unnecessary account fees. Maintaining multiple accounts may also entail
extra paperwork and increases the chance that you’ll forget to update your
address or beneficiary for one or more of your accounts. That can create
headaches for you when you want access to the assets in a particular account
and for your heirs when your estate is settled.
What’s more, the complications for your estate might not end once the
accounts are gathered. Leaving different accounts to different individual
beneficiaries may lead to unintended inequalities and resentment
While it may not ring true when you’re thinking about your savings overall,
when it comes to retirement plan accounts, that old adage "less is
more" can make a lot of sense.
Set a date with your financial advisor to start cleaning those forgotten
accounts; the advantages and disadvantages of consolidating your retirement
accounts should be considered in order to determine which option makes the most
sense for you.
Your financial advisor can help you determine if your retirement assets are
working together toward your goals.
Merrill Lynch Wealth Management Advisor. She can be reached at 410-213-8520.)