Should I combine my retirement accounts?

Read time: 3 to 4 minutes

If you’ve had a few jobs over the years (or more than a few), you probably have several different retirement accounts too. If so, it may be in your best interest to combine your accounts into one. Here’s why.

Tighter control over your money

In addition to multiple 401(k) retirement accounts, you may even have an IRA or two.

While there’s nothing inherently wrong with this, having multiple retirement accounts at different institutions can be confusing, costly, and hard to manage.

The good news is you may be able to combine some of those accounts.

Fewer accounts can save you money

When it comes to investing, costs matter. The less you pay to invest, the more money you get to keep. And combining accounts is one way to potentially bring down the cost of investing.

For example, maybe an old 401(k) account is charging you a maintenance fee that would go away if you combined it with your current employer plan account. Or maybe your current plan gives you access to lower cost mutual funds than your old one.

You can learn more about why costs matter here.

Fewer accounts can save you frustration

Multiple account statements, forms, website passwords, phone numbers ... there’s a lot to keep track of when you have multiple retirement accounts.

Consider combining accounts to make things simpler. Doing so could make the task of managing your money a lot less frustrating and give you greater control.

You can combine IRAs

Over the years, many people open IRAs at different companies. Combining them could lead to less paperwork and lower costs. A larger balance in a single account, for instance, could mean having a low-balance fee waived.

Combining accounts can help you maintain a good balance

At least once a year, it’s smart to check and make sure you still have a mix of investments that’s well balanced. This can be easier to do when you have only one account.

When you have multiple accounts, there’s a tendency to look at each one individually. That can leave you with a skewed picture of your overall mix of stocks, bonds, and cash (a money market fund, for example).

Don’t miss the big picture

Let’s say John has three accounts. He gets a statement for one of them that shows 90% of his money is invested in bonds.

On its own, this might seem overly conservative. But, if John’s other accounts are more heavily weighted in stocks, his overall portfolio might be well diversified.

Having his money in three places at once makes figuring his overall investment mix complicated. He might be better off combining the three accounts—or getting professional advice.

Here’s how to get started

If you have a balance in a former employer's retirement plan, in most cases you can roll over the money to your current plan. Check your current plan's rules to make sure rollovers are allowed.

To get started with a rollover, you'll need to:

Contact the financial institutional where your prior 401(k) plan is located to initiate the rollover.
Complete your rollover digitally with Vanguard. You can easily complete your rollover through our website.

Need assistance? Call Vanguard at 800-523-1188.

How to roll over an IRA to a Vanguard IRA®

Alternatively, if you’re interested in rolling over an outside account to a Vanguard IRA, call 800-551-8631 or click here.

HELPFUL HINT

If you roll over your old plan money to your current plan, you might be able to access the money through a loan.

Whenever you invest, there’s a chance you could lose the money. Diversifying means having different types of investments. It doesn’t guarantee you’ll make a profit or that you won’t lose money.