Should I Consolidate My Multiple 401(k) Accounts?
Have your question answered on the Money Wisdom Question Series!
If you’ve contributed to multiple 401(k) or other employer sponsored plans over the years, you may be wondering about today’s question, is it time to roll your old accounts into an IRA? In this week’s Money Wisdom Question Series, Heath Grossman, CFP® shares key factors to consider when deciding whether consolidating your 401(k)s is the right move for you.
Your Investment Options
After leaving an employer or ultimately retiring, most people choose to roll over their 401(k)s into a traditional IRA. An individual retirement account can often provide more control and flexibility over your investments. While 401(k) plans are typically limited in terms of investment options, IRAs open you up to a much broader range of possibilities.
In rare cases, there may be a unique investment opportunity inherent to your 401(k) plan that’s far better than anything you could receive outside of it. In this scenario, it may be favorable to keep some or all your funds where they are. While we don’t see this happen often, it’s important to be aware of all your investment options.
Your Investment Strategy
Consolidating your 401(k)s is also a good way to keep track of your money and ensure you have a unified investment strategy. Overseeing multiple accounts can be cumbersome, especially when they’re scattered among different retirement plan providers. Consolidation of your accounts allows you to streamline your portfolio, making it easier for you and your financial advisor to manage. It can also give you a more accurate depiction of your financial situation, which is especially important as you approach retirement and start developing an income strategy.
Your Age
Another factor to consider is your age. Once you turn 59½, you can access funds from your 401(k) without any penalty. However, under certain circumstances, you can withdraw penalty-free from your 401(k) before age 59 ½. For those in this situation who don’t have sufficient liquid assets outside of a 401(k) and need access to readily available cash, it may make sense to keep some or all your money in that account for easy withdrawal.
Before making this decision, you’ll want to evaluate your overall retirement strategy with a financial advisor. In most cases, consolidating your old 401(k) plans can simplify your accounts, expand your investment opportunities, and allow your financial advisor to manage your money more efficiently.
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The Ultimate 401(k) Guide
Learn the 5 decisions you need to make regarding your 401(k) in this book by Eric Hogarth, CFP®. He’ll help guide you through the many options you have with your 401(k) and to provide the clarity you need to help you make the important decisions that will provide the foundation for you and your family’s financial future.
Information presented here is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
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Richard S.Richard S. is a client of Johnson Brunetti and received no compensation for his statement.
“We have been extremely happy with our advisor and the services offered. We previously had accounts with another advisor. We had no issues, but chose to consolidate everything with Johnson Brunetti. We made a great decision with that.”
Testimonials received in response to Johnson Brunetti survey conducted in 2024 and in 2026. Please click each respective year for a description of the respective survey and a summary of the survey results.
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John & Laura U.John & Laura U. are clients of Johnson Brunetti and received no compensation for their statement.
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Testimonials received in response to Johnson Brunetti survey conducted in 2024 and in 2026. Please click each respective year for a description of the respective survey and a summary of the survey results.
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Jackie L.Jackie L. is a client of Johnson Brunetti and received no compensation for her statement.
“I love how everyone in the company makes us feel. Like we are one big happy family. I wouldn’t change anything!”
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Annette L.Annette L. is a client of Johnson Brunetti and received no compensation for her statement.