If you\u2019ve been working for some time and have always had an interest in retirement savings, there\u2019s a good chance that you\u2019ve got multiple accounts and plans on the go.\r\n\r\nAlthough it could be beneficial to stick with this approach, generally having more than one retirement account can get confusing and difficult to manage.\r\n\r\nSo, how does one combine retirement accounts and are you even allow to do it?\r\n\r\nThere are some options like rolling over one account into another or merging two of your 401k plans to the same one. This usually isn\u2019t hard to do but you should consider the value of consolidating these accounts when compared to optimizing them and leaving them as they are, and so the question becomes harder to answer.\r\n\r\nThere are benefits and drawbacks to combining your retirement accounts and it takes some knowledge to know what the solution is.\r\n\r\nWe\u2019ll look at some common accounts and what it\u2019s worth to consolidate them, as well as if you\u2019re actually able to, so you can get an idea of what\u2019s possible with your retirement savings plan.\r\n\r\nWhat Is The Benefit Of Combining Retirement Accounts?\r\nConsolidating Retirement Accounts\r\nThe purpose of learning how to combine retirement accounts is twofold.\r\n\r\nFirst, you want to simplify things by reducing the number of accounts you have to manage, but you also want to optimize them so you\u2019re utilizing the best investment options possible.\r\n\r\nThese are some other benefits that might sway you either way:\r\n\r\nEASIER TO MANAGE\r\nHaving just one or two retirement accounts is easy to keep track of and ensures that you\u2019re able to manage them effectively.\r\n\r\nWhen we have too many on the go it\u2019s easy to ignore them all as the thought can be overwhelming.\r\n\r\nREDUCED FEES\r\nRetirement accounts usually have associated fees and there\u2019s no point having many of the same types of account and being charged for it when you could easily consolidate them to a single provider.\r\n\r\nGOOD FOR BENEFICIARIES\r\nAn organized but diverse retirement savings plan will be easier for your beneficiaries to navigate, but also makes it easier for you to update any beneficiary information.\r\n\r\nLESS PAPERWORK\r\nAnything we can do to reduce the mess of paperwork is a good thing, so consolidating accounts to one well-established provider can take care of this.\r\n\r\nThe main goal according to experts is having between one and three retirement accounts at any given time.\r\n\r\nThis ensures maximum consolidation but also optimization, with a variety of an employer-sponsored retirement plans, a traditional IRA, and a Roth IRA being the smartest approach.\r\n\r\nCan Your 401k And 403b Be Combined? \r\n401k Consolidation\r\nThe most common question people have is whether their 401k and 403b accounts can be combined.\r\n\r\nThis usually occurs because employees have multiple accounts from their previous employers and want to learn about consolidating them.\r\n\r\nThere are three options you can choose from if you have both of these accounts, including:\r\n\r\nLeaving all accounts where they are and continuing to manage them separately.\r\nRoll the accounts into the 401k you have with your current employer. This can be done by speaking to your employer, but there may be restrictions on rollovers.\r\nRoll the accounts into an IRA by selecting your own investment provider and options, usually by speaking to a broker or financial planner.\r\nCan You Combine IRAs? \r\nCan You Combine IRA\r\nThe second most common concern about combing retirement accounts has to do with IRAs.\r\n\r\nThis occurs when people open new IRAs at different times, have a few different providers or plans, or if you\u2019ve previously used an IRA due to an old employer rollover.\r\n\r\nIf you need to combine IRA retirement accounts, you have the following options:\r\n\r\nLeave all of your IRA accounts as they are.\r\nRoll either one or more of the IRAs into your current 401k or 402b. However, some plans may not accept rollovers, so speak to your employer about what restrictions apply.\r\nCombine all of your separate IRAs into the one account and stay with just one provider. This will only work if you are combining the same type of IRAs together (like traditional/Roth), otherwise, you will need to do a Roth conversion and this comes with certain taxes.\r\nCan You Contribute To A 401k And 403b In The Same Year?\r\n401k And 403b Contribution\r\nIn short, you are able to contribute to a 401k and 403b in the same year, but some restrictions do apply on much money you can put into either plan.\r\n\r\nIn 2018, the contribution limits state that you can make a salary deferral contribution up to $18,5000 and for those over 50 years of age, you can make an additional $6,000 contribution.\r\n\r\nBoth accounts need to be taken into consideration, with a combined contribution of $18,500 for both, or $24,500 if you\u2019re eligible for age-related catch ups.\r\n\r\nPeople who have worked with certain employers for at least 15 years might be given an extra contribution limit of $3,000.\r\n\r\nTherefore, if you\u2019re over the age of 50 the maximum amount you can put into these accounts in a year would be $27,500.\r\n\r\nIf both of these accounts are in place with the one employer, they will usually be able to monitor how much is going in and let you know if you\u2019re close to reaching his limit.\r\n\r\nHowever, for people with different employer 401k and 403b plans, they will be unable to find this out.\r\n\r\nTherefore, it\u2019s your responsibility to stay on top of your combined contributions otherwise you will be liable for hefty penalties and taxes if you go over.\r\n\r\nCan You Merge 401k Accounts?\r\nCan you Merge 401k accounts?\r\nHaving multiple 401k accounts is fairly common as people generally sign up to a new provider whenever they change employers.\r\n\r\nMerging these accounts is usually allowed but it depends on the new employer plan that you\u2019re trying to move the old ones into, as sometimes restrictions apply.\r\n\r\nJust because there is the option to merge your 401k accounts, that doesn\u2019t always mean that it\u2019s the best approach.\r\n\r\nAlthough convenient, merging your previous accounts into a new one might not be ideal because your new plan simply might not be as good.\r\n\r\nIt could have fewer investment options or higher fees, so you\u2019ll want to do your research.\r\n\r\nYour other options when merging 401k accounts is to stick with one of the older providers and make this the account that the rest consolidate into.\r\n\r\nOtherwise, you could roll your old plans into a self-directed IRA instead, which gives you greater control over your investment choices.\r\n\r\nThings To Factor In Before You Combine Retirement Accounts\r\nThere are four things you should ask yourself before you attempt to combine or consolidate retirement accounts.\r\n\r\nConsider each of these factors before you come up with a final plan for combing accounts, and you\u2019ll be making a much smarter decision in the long term.\r\n\r\nDOES THIS FIT MY INVESTMENT PLAN?\r\nYour Investment Plans to combine retirement accounts\r\nLook at your investment plan in its entirety, including the end goal and the investment options in your portfolio.\r\n\r\nWill moving these accounts together be working towards that goal or will it be minimizing what I\u2019m capable of in terms of investments?\r\n\r\nWHAT FEES ARE ASSOCIATED?\r\nRolling funds over or merging them into one plan or provider sometimes comes with extra costs.\r\n\r\nThere are administrative fees and management fees to consider with every type of retirement account so make sure you\u2019re aware of them.\r\n\r\nIS IT REALLY MORE CONVENIENT?\r\nYou might assume that having just one retirement account is better because of the convenience factor, and while this is usually the case, you have to weigh up that convenience with the other financial benefits.\r\n\r\nWHAT IS MY PROTECTION AGAINST CREDITORS?\r\nAre there any protections against creditors? | Combine Retirement Accounts\r\nCertain retirement plans like 401ks have lifetime protection from creditors so they can\u2019t be touched even in the case of bankruptcy.\r\n\r\nMoving these to another type of account might take away this protection so think about how it could affect you.\r\n\r\nRelated Questions\r\nRetirement accounts are something that most employed Americans have, but they can easily get confused and overwhelming when we have too many on the go.\r\n\r\nHere are some commonly asked questions about these plans to point you in the right direction of consolidation.\r\n\r\nCAN I MERGE MY 401K WITH MY SPOUSE?\r\nA 401k cannot be merged with someone else\u2019s at any time, even if they are your spouse.\r\n\r\nHowever, there are options for merging both of your separate accounts to a sole provider which can sometimes reduce fees.\r\n\r\nHOW OFTEN CAN I ROLLOVER MY ACCOUNTS?\r\nYou are only allowed to roll over IRA accounts once every 12 months.\r\n\r\nWith a 401k, there is no limit to how many times you can roll them over, but your employer must allow rollovers to your new plan to be eligible.