You might consider investing using a time segmentation strategy: Purchase bonds or CDs that will mature in different years, so you will be able to count on a certain amount of income becoming available each year. If you can handle the risk, purchase stocks that may generate bigger returns over the longer term. When you buy or sell an investment, a transaction fee may be charged. If you consolidate accounts, you should make fewer total sales and purchases over time, which would result in lower total transaction fees. Some investment management companies reduce or even waive fees when your account reaches a minimum size. One of the best ways to increase your investment returns is to reduce the investment fees you pay, and consolidating accounts helps in that regard. If you have multiple accounts, each financial firm will send you paperwork or an email each year, notifying you of your RMD. That can be a hassle. As you get older, it can be easy to overlook these notifications. And if you fail to make an RMD, the IRS makes you pay 50 percent of the amount you should have withdrawn as a penalty. You’ll find it will be much easier to consolidate your accounts and take one distribution from one IRA account each year rather than trying to manage distributions from multiple 401(k)s and IRAs. The IRS permits you to take your RMD from only one IRA account when you have more than one, but you would still need to figure out the total RMD you must take, based on the values of all of your IRA accounts. However, for all other types of retirement accounts, including 401(k)s, you have to withdraw the RMD separately from each account. To make your life even easier, you can work with your financial institution to set up the RMD so it will be broken up into installments and become more like a steady paycheck. You won’t need to keep spreadsheets to track investments across multiple accounts, and if you link accounts to an online service such as Quicken, you’ll have fewer linking issues to troubleshoot. When you need to make changes, such as to your email address, mailing address, phone number, and beneficiary, you’ll need to make only one phone call. Your investments can be just as safe and diversified if you combine accounts with one well-established custodian. Inside of a brokerage account, you can own mutual funds, stocks, bonds, and even CDs. You don’t need to have your investments spread across several financial institutions. Simplify your life and consolidate. It will take time and paperwork to combine the accounts, but once you do, you’ll find that your time invested will provide a good return in time saved.
