Combining your investment accounts can ease the strains of managing your finances and you'll probably get a better overview of your investments to boot. You probably don't need so many accounts, particularly if you have or can open up accounts in the large financial supermarkets that allow stocks, bonds, as well as mutual funds from many different mutual fund companies in a single account. These tips will help you consolidate your accounts.
- A single or joint brokerage account should be all you need.
- If marital bliss is enhanced by having two individual accounts rather than a joint account, so be it.
- If you're considering a joint brokerage account, make sure it's okay from an estate planning standpoint. Sometimes, holding investments or other assets in joint name with a spouse or worse with a child is a no-no. The attorney who drew up your will can advise.
- The big investment companies are so anxious to attract your money that they're often happy to permit you to use your investment account as your checking account. While this means one less account, my preference is to keep your spending separate from your investing.
- Retirement accounts are usually the biggest source of account gluttony, because it's easy to set up a retirement account with a small amount of money. Once established, most people don't want to spend the time necessary to close out the small account and transfer the money to another account.
- With respect to IRAs, you should be able to combine all of your traditional IRAs, including contributory and rollover accounts, into a single account. Roth IRAs require a separate Roth IRA account.
- Spouses can't combine IRA or other retirement accounts with the other spouse''s accounts.
Self-employed retirement accounts.
- If you have set up retirement accounts for contributions based on your self-employment income, you generally need only a single account for the type of account you have established, a SEP-IRA or solo 401(k) plan, for example.
- Many self-employed people switch to another plan somewhere along the line. If, for example, you've moved from a Keogh plan to a defined benefit plan, you can usually terminate the previous plan and roll it over into your traditional IRA account.