Consolidating multiple 401k accounts

RMD amounts for qualified plans cannot be distributed from IRAs and vice versa.

However, if you own multiple IRAs or multiple 403(b) amounts, you may aggregate the RMD for all similar plans (Traditional IRAs or 403(b)) and then take the amount from one account of each type of plan.

If you have multiple retirement accounts, you are allowed to combine and withdraw the multiple RMDs from one retirement account; however, only RMDs from certain types of retirement plans can be combined.

For instance, say the RMD for your qualified plan is ,000 and the RMD for your Traditional IRA is ,000.

“It makes it a lot more difficult to recognize where they are in the planning process,” says Sarah Walsh, VP for retirement solutions at Fidelity.

In most cases, experts say, people should consolidate their accounts; to do otherwise flies in the face of fundamental investing principles.

There’s yet another wrinkle in the new age of retirementand job insecurity— keeping track of all those company retirement savings plans you’ve racked up, along with that IRA you opened years ago, and creating a coherent investment strategywith them. “Our current system of self-directed retirement accounts really requires people to do what they’re not equipped to do,” says Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School in New York.

That is: manage their own money or find an unbiased third party to do it for them without falling prey to bad advice and/or high fees.

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Along with the loss of the company pension and the proliferation of the self-directed retirement plan — 401(k)s are the most common form — is a job-churning labor market.

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