How many investment accounts is too many?
I have both a traditional IRA and Roth IRA account that are separate from my employer 401(k) accounts tht I use to funnel over employer accounts after switching jobs. Does it make sense to maintain these separate accounts, or would I be better off funneling everything into an employer account? If keeping the separate accounts makes sense, should I contribute to all 3, or just max out my employer account? #401k #ira
So, if you can keep track it is ok. If you are not being charged it is ok. If you can benefit from one big account instead of several small ones consider the merge (example: if you have more than 50k in one vanguar account you get admiral shares).
My plan is to use Roth 401k and IRA until over income limit(139k) then switch to using traditional 401k and IRA. When switching jobs, I'll roll over Roth 401k into the Roth IRA and keep that open. Will do the same with traditional 401k whenever switching employers. Will keep both IRAs open.
IRA income limit is like 70k otherwise it's non deductible (i.e. basically an taxable account). You should be doing Roth IRA until the Roth income limit of 130k and then use backdoor method which means you put money into IRA (non-deductible) and convert to Roth IRA.
I knew about backdoor but thought that was only possible if employer 401k plan allows after tax contributions and you then roll it over at the end of the year. Good to know I can do it with a traditional IRA.
Absolutely keep them separate. Your investment options outside of a company account are so much more. Most company accounts only allow you to invest in options that won’t get them sued if the market tanks. For example my current employer offers like 7-10 options and that’s it.
I have a Roth IRA from before I hit the income limit, my current employer 401k, a traditional IRA, a whole life insurance account (accrues interest), and of course personal investment accounts. The traditional IRA is my main retirement account that my 401k satellites around - every time I switch jobs I rollover into the IRA. Never hurts to diversify more as long as you keep an eye on them.
You could still contribute to Roth IRA if you're over the contribution method via backdoor. However having money in an IRA would introduce the pro-rata rule when doing so...
Countless statistics show if you have a diversified set of funds in a 401k, best thing to do is to leave it as is. Once you moved the money out to a self managed IRA and start trading yourself(think r/wsb), you’ll underperform their market(at best) or lose all your money(at worst).
My non-employer accounts are managed by a firm. Does that make a difference?
Hmm that's interesting, I'm curious what people say as well, I have a traditional IRA and 2 401ks from my previous employer that I haven't switched yet. I'm also curious how people diversify their portfolio and if they bother with bonds at all I also do some short term investing as well, although I have a lucky streak of picking stuff that's about to lose value. Hodl gang I guess