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HOWEVER: You may have good reasons to have more accounts, such as needing to separate funds for estate planning purposes. Still, you can just add an account at a current bank rather than
going elsewhere. INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) AND 401(K)S TRIM BACK TO: 1-4 accounts WHY? If you collect too many tax-advantaged retirement accounts — and too many different
investments in those accounts — you end up with a jumble that makes it harder to manage your portfolio and your withdrawals. So, consolidating them makes sense, with one major caveat: You
don't want to combine traditional accounts and Roth accounts. Traditional IRAs and 401(k)s typically contain contributions you didn't pay taxes on up front; instead, you pay taxes
when you pull funds out. Roth IRAs and Roth 401(k)s are pretty much the opposite: You paid all necessary taxes before you deposited money, so you generally won't have to pay taxes on
withdrawals. But if you combine Roth accounts with traditional accounts, you could pay taxes twice on the same money. HOW? Aim to move your investments into an account that offers the lowest
fees — compare the expense ratios of the funds on the menu — and the most diversified funds. This might be your 401(k), especially if you're in a large plan, or it might be an IRA at a
major mutual fund company. You can usually roll a 401(k) established with a former employer into an IRA; it's possible, but not as likely, that your current employer's plan will
accept your transfer of an IRA or a 401(k) from another job. In any case, the easiest way to do this is to contact the company or retirement-plan administrator where you want your money to
end up; that firm will help initiate the transfer. Always do what's known as a direct custodian-to-custodian transfer, meaning that any checks are made out to the receiving institution,
never to you personally. Otherwise, a slight mix-up might incur heavy taxes. HOWEVER: You may need to sell some or all of the securities in the accounts you close and transfer cash instead.
Unfortunately, there's a risk that in the stretch of time between when you cash out and when you reinvest in your new account, you'll miss out on a major market rally. TAXABLE
ACCOUNTS TRIM BACK TO: 1 investment account and fewer investments WHY? Having fewer accounts, and fewer investments within those accounts, makes it far simpler for you to see your entire
portfolio. HOW? Move investments to a brokerage offering low or no fees. So you don't have to sell your securities and repurchase them at your new brokerage, consider telling the firm
receiving the assets that you want to transfer them “in kind.” The brokerage will start the process. You might also simplify by investing in a few broad low-cost index funds. HOWEVER:
It's possible that the new brokerage can't hold a security you now own. If one or two fall into that category, you can either keep those at your old custodian or sell them.