SURVEY SAYS: Multiple Retirement Accounts

March 18, 2013 – Recently, a press release indicated consolidating retirement savings accounts increases simplification for participants and reduces employer costs.

Last week, I asked NewsDash readers, how many retirement savings accounts do you have? What type are they?  

The most common response, selected by nearly one-third (31.1%) of responding readers was three. Twenty-seven percent of respondents indicated they have more than four retirement accounts; 18.9% have two; 14.9% have four; and 8.1% have one.  

Nearly all (98.6%) of responding readers have defined contribution (DC) plan accounts, while 75.7% have individual retirement accounts (IRAs). More than half (55.4%) have defined benefit (DB) plan accounts, and 43.2% indicated they have retail savings accounts, such as regular savings, CDs or brokerage accounts. Eight percent have non-qualified deferred compensation (NQDC) plan accounts.  

Among the “other” retirement accounts cited by 10.8% of respondents were self-employed plans (SEPs), savings bonds and annuities.  

In verbatim responses, several readers said consolidating retirement accounts isn’t necessarily best; some said they maintained old accounts because of better or cheaper investments or to increase diversification.  Editor’s Choice is a tie this week between “Let’s see, one for the master, one for the dame and one for the little boy that lives down the lane which combined amount to a bag of magic beans. Get my drift. Now, where’s that list of the top 100 companies for employees over 65?” and “The only one I have a hope of hanging onto over government takeover or taxation though is the can buried in my back yard. (This survey is confidential – right?)”


Don't want to exceed the insurance on my accounts other than my 401 (k) which are all in cash. 


The prudent stategy to follow on this largely depends on the owner's ability to track multiple accounts, the fund offerings and fees under each vehicle, and the size of the accounts. Consolidating them into one isn't necessarily the best option for all. 


The only one I have a hope of hanging onto over government takeover or taxation though is the can buried in my back yard. (This survey is confidential - right?) 


My DC account has both pre and post tax, rollover money and is shown on one statement. I can go on my employer's website to see my total retirement DB & DC. So I'm relatively consolidated but I could live with separate account statements. 


Ex-wife is about to get one 


Multiple accounts allows greater diversification -- i.e., mutual fund IRA, brokerage IRA, self-directed brokerage IRA, employer sponsored DC and DB plans. 


Left my DC plan assets with my prior employers for variety of investments and risk so I have 3 401k) accounts with 3 employers. DB assets with 2 prior employers can't be transferred. 


At work - DB and 401k At brokerage - rollover IRA and Roth IRA At mutual fund - regular IRA So ... no easy way to consolidate. 


I don't ever put all of my eggs in one basket in business or my personal life. I like to have multiple investment styles, and any one manager can experience style-drift. 


Consolidation is good for keeping track of what you have. So many employees lose track of that. However, employees need to be sure they are well diversified too and sometimes having multiple accounts can help with that effort. 


As a industry professional, I like to see what the various providers offer (website, service models, communications, etc.) from a participant perspective. Kind of my own secret shopper testing. 


At this moment my only retirement account is my employer's 401(k) plan. I do plan on starting a Roth IRA for a little tax diversification and additional savings over the deferral limit. I'm a big believer in consolidating like accounts. Much less complicated and there can be benefits associated with having a larger account. Of course, this requires sufficient choice and flexibility of investment options. 


My previous employers were small and did not have access to institutional share classes. I get a higher return with my current plan, due to lower costs, so it made sense to do the roll-overs.

Verbatim (cont.)  

Everything outside my DB account is confusing. I wish I could have everything inside my DB plan. 


My IRA is a rollover IRA from my former employer's plan. I only keep it there because it holds one stock that cannot be transferred in kind. I'd rather not sell it and have to repurchase it. Plus, my current employer's plan has a $250 annual fee related to a brokerage account where this stock would be held if moved. 


Would prefer to be consolidated, however pricing and options drive separation. 


No interest in consolidation to a single account; however, after retirement a consolidation to 2 or 3 will be considered. 


Have two only because husband's company sold out and was told he had to roll over to IRA. Later learned was told wrong, but then could not roll back into current 401K. So, have two! 


At some time in the future I will consolidate them; until then I prefer to spread the risk around. 


I have one IRA for past employer rollovers, and one current 401(k) account with my current employer. I can benchmark one against the other. 


My IRA is a Roth IRA that I had to start, becasue my 401(k) did not have Roth accounts. They added Roth 401(k) last year. Better late than never! 


At one point, I had 3 separate retirement accounts. When I came to wrok here, I moved all to this one. 


More than four! What an eye-opener! I need to get myself consolidated! 


I would prefer to have a consolidated account and/or statement. Currently I use to consolidate my retirement savings. 


By leaving my old 401(k) account in its original plan, it is more accessible should I need it and it offers different (and more successful) investment options than my new plan, even though both are administered by my current employer. Sometimes I wish I could transfer my active 401(k) account back into my former plan! My old DB plan doesn't offer a lump sum option, but now that I'm approaching 55, I'm looking to start drawing annuity payments even while I'm still working, to help with my son's college tuition and maybe start me on a new career (shhhh).

Verbatim (cont.)  

tiny (very small, itsy-bitsy) pension hanging out there at a firm I left 6 years ago--just give me the money! I'm tired of remembering the log in and password to check on it and make sure they haven't lost me! 


All are separate accounts. Current employer 401k and former employer 401k rollover IRA are with the same institution. DB plan benefit is from previous employer. Retail brokerage account is with another institution. [excludes spouses accounts which are all with other institutions] 


Once retired, it would be easier to maintain only one account. 


It would be nice if language in plans would be required to offer payout options of vested balances regardless of plan type ( DB, DC) and always allow for rollover money in. That is not always the case thus, any person would potentially have at least two accounts regardless even if an employee only makes one job change over their entire career. 


I'd love to consolidate, but my DC plan doesn't permit rollovers from IRAs. 


It is hard to remember the separate small IRAs until their statements come in the mail. I have rolled all my retirement accounts into my current plan so I know exactly how much I have. 


I get plan benefits in DC and more investment options. Also different investment option in the two DC plans. Better able to manage diversity by keeping multiple plans. 


Let's see, one for the master, one for the dame and one for the little boy that lives down the lane which combined amount to a bag of magic beans. Get my drift. Now, where's that list of the top 100 companies for employees over 65. 


I have not found that having multiple accounts makes it difficult to keep track of things. 


Aggregating all my savings accounts might make some things easier, but it would make others harder. I have left my 401ks behind because at one provider I have exceptionally low fees and index investments, another because I like the style and performance, and the other because - well, because it is the plan of my current employer. It's not always stupidity, or carelessness, or laziness that underlies these decisions - though those that would have you bring them all together under THEIR roof would have us think otherwise... 


With the exception of the IRA all are with my current employer. I would like to receive a regular consolidated statement of all three. 


I don't think having separate accounts is a bad thing. And why is it that those promoting consolidation are always the folks who are looking for you to consolidate your accounts WITH THEM??!! 



NOTE: Responses reflect the opinions of individual readers and not the stance of Asset International or its affiliates.