Reasons to consolidate your 401k 

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1 │ Difficult to manage

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Implementing an investment strategy across a brokerage account, an IRA and a Roth IRA is hard enough. For couples, that compounds with an additional IRA and Roth IRA – we’re up to five accounts now. Making sure you have the right investments in the right accounts isn’t easy.

If one of you has multiple IRAs or 401(k)s, then you’re making your investment management harder than it needs to be. In addition, you may also be paying more in account and transaction fees. Consolidating makes managing your investments easier.

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2 │ Limited Investment Options

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One of the limitations of a 401(k) is that it typically offers a limited range of investment options. While these options can include a variety of mutual funds, target-date funds, and sometimes company stock, they may not provide the same level of flexibility or diversity as other investment vehicles like IRAs or brokerage accounts. This limitation can make it challenging to fully customize your investment strategy or take advantage of a broader range of opportunities.

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3 │ Fees

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401(k) plans often come with various fees that can impact your overall returns. These fees can include:

• Administrative Fees: Charged by the plan provider for managing the plan, including record-keeping, customer service, and other administrative tasks.

• Investment Fees: These are associated with the funds you invest in within your 401(k). They can include expense ratios for mutual funds, which cover the cost of managing the fund.

• Individual Service Fees: These may be charged for specific actions, such as taking a loan from your 401(k), making withdrawals, or rolling over funds.