If you are a woman who joined the motherhood clan later in life like I did, you are likely to have had jobs or a career that included the gathering of multiple 401Ks and IRAs. Do you now find yourself with retirement accounts strewn across several large and fairly meaningless (at least to you) brokerage firms?
While the thought of organizing this seemingly untouchable group of accounts can be overwhelming, indeed to the point of putting it off for so many years that you’ve lost passwords and all knowledge of what is rightfully yours, I promise that taking the time to get them all under one roof and taking control of them will go miles in maintaining your sanity.
Upon my leaving the corporate world due to baby #1 and my husband’s last job change, I realized we were sitting on 6 different and totally unassociated retirement accounts (both 401Ks and IRAs). This drove me a bit crazy as I felt I had no control over the situation much less a comfort level that this money was working as hard as it can for us.
I did a lot of research and am happy to report that there are IRA’s out there that are called “age-based” retirement accounts. The fundamental principle is that the farther away from retirement you are, the more risky your positions in the account are, i.e. more risk = greater return. As you get closer to retirement, the mix of the account changes to less and less risky positions. So if you are in your 30s, the majority of your mix will be in equities while a smaller portion will be in safer instruments like bonds and index funds. As you approach your 60’s – the mix gradually becomes the inverse as you will need to start using that money in the shorter term. Two companies, Vanguard and T.Rowe Price offer these “age based” funds and they have been heralded often in a most positive way.
So, if you can stomach the bureaucratic process of calling the companies where you and your husband no longer work and filling out the paperwork (which is minimal, I might add, it just requires some following up), I would highly recommend aggregating your retirement holdings. Each age based fund invests your money across an array of funds, everything from international to large cap, mid cap and small cap, so you are secure in the diversity it offers. In fact, both Vanguard and T.Rowe Price have such a rich and wide reaching mutual fund offering, short of Fidelity it would be hard to find a company that can match the kind of diversity they offer. Not to mention, they take care of adjusting the risk “mix” as you approach retirement. It’s fabulous!!!
Good luck.
While the thought of organizing this seemingly untouchable group of accounts can be overwhelming, indeed to the point of putting it off for so many years that you’ve lost passwords and all knowledge of what is rightfully yours, I promise that taking the time to get them all under one roof and taking control of them will go miles in maintaining your sanity.
Upon my leaving the corporate world due to baby #1 and my husband’s last job change, I realized we were sitting on 6 different and totally unassociated retirement accounts (both 401Ks and IRAs). This drove me a bit crazy as I felt I had no control over the situation much less a comfort level that this money was working as hard as it can for us.
I did a lot of research and am happy to report that there are IRA’s out there that are called “age-based” retirement accounts. The fundamental principle is that the farther away from retirement you are, the more risky your positions in the account are, i.e. more risk = greater return. As you get closer to retirement, the mix of the account changes to less and less risky positions. So if you are in your 30s, the majority of your mix will be in equities while a smaller portion will be in safer instruments like bonds and index funds. As you approach your 60’s – the mix gradually becomes the inverse as you will need to start using that money in the shorter term. Two companies, Vanguard and T.Rowe Price offer these “age based” funds and they have been heralded often in a most positive way.
So, if you can stomach the bureaucratic process of calling the companies where you and your husband no longer work and filling out the paperwork (which is minimal, I might add, it just requires some following up), I would highly recommend aggregating your retirement holdings. Each age based fund invests your money across an array of funds, everything from international to large cap, mid cap and small cap, so you are secure in the diversity it offers. In fact, both Vanguard and T.Rowe Price have such a rich and wide reaching mutual fund offering, short of Fidelity it would be hard to find a company that can match the kind of diversity they offer. Not to mention, they take care of adjusting the risk “mix” as you approach retirement. It’s fabulous!!!
Good luck.
1 comment:
Love this stuff.
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