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Help! Between the two of us, my husband and I have FIVE retirement accounts.

me-wife-- traditional IRA from former employment- $229K
husband- 401K with current employer- $45K
husband- individual 401K from former sole proprietorship- $24K
husband- SEP IRA from former sole proprietorship- $12K
husband- Roth IRA- $6K

I would love to find a way to combine them without tax implications if possible. In the alternative, I wonder if there is some relatively simple tool that we could use to get an overall picture of how we're allocated, how we're performing, etc. This tool should be easy to use and cheap or free. Our current method is a rough calculation on Post-it notes.

I don't know if this matters, but our ages are 40 and 44 and our current gross income is about $145K. Thanks!

Courtney
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me-wife-- traditional IRA from former employment- $229K
husband- 401K with current employer- $45K
husband- individual 401K from former sole proprietorship- $24K
husband- SEP IRA from former sole proprietorship- $12K
husband- Roth IRA- $6K

I would love to find a way to combine them without tax implications if possible.


The best you can do at this point is roll your husband's two sole prop accounts in one traditional IRA. Other than that you're stuck.

Actually, there may be another possibility, but I wouldn't recommend it. If your husband's current 401(k) allows rollovers in, he could roll those accounts into his current 401(k). I think he's better off leaving them under his control even if he can roll them.

Phil
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>> Actually, there may be another possibility, but I wouldn't recommend it. If your husband's current 401(k) allows rollovers in, he could roll those accounts into his current 401(k). I think he's better off leaving them under his control even if he can roll them. <<

I agree with Phil, but with one *possible* exception.

If your husband plans to retire between the ages of 55 and 59 1/2, it may be better to have the money in the 401(k) plan, because IRAs don't allow penalty-free withdrawals until age 59 1/2 (with some exceptions such as taking "substantially equal periodic payments" under Rule 72t), but a 401(k) with a current employer allows it as early age 55 assuming you are retired and did not separate service with that employer until the year you turned 55.

Other than that, I'd agree that the IRA is the way to go unless you're pretty sure he'll retire between the ages of 55 and 59 and will need his prior solo 401(k) for income during that time.

#29
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For your overall asset allocation, try the Morningstar X-ray tool.

http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx?dt=0.7055475

Any of the financial packages like Quicken or MS Money will allow you get get an overall view. Many new PC's come with a starter version of one of theses already installed so you might check to see if you already have one of these.

Greg
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Combine them? Not sure what you had in mind here, but first of all you can't combine your account with his. All of these retirement accounts are personal, and can't be joint.

The easiest option for dealing with the rest of them (with the exception of the current employer 401K)is to move them all to the same brokerage house to simplify paperwork, and make performance analysis easier. For example, Fidelity, which I use, has all sorts of portfolio analysis tools. Perhaps you've already done this?

RDW
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Thanks all.... The Morningstar tool looks easy and the price can't be beat! I am going to check and see whether we have Quicken or similar since I hope that would allow us to track everything in more integrated fashion.

Anyone have preferences/suggestions about the best program for us? In addition to our slightly messy retirement savings, we have about $800K in mutual funds at Vanguard and two mortgages (on two properties). It would be helpful to have something to help with forecasting over time (what happens when we pay off mortgage #1, if we dump that monthly payment into mortgage #2 when will we pay that one off etc.)

thanks again
Courtney
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RainyDayWoman, I guess we've done all we can-- both of his IRAs are at Vanguard, as is mine. His employer 401K is somewhere else and his individual 401K is at TRowePrice (Vanguard doesn't offer). I love Vanguard's tools as far as checking asset allocation etc. thanks
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Hmmm. An individual 401K from a former employer could be rolled over into an IRA and moved to Vanguard to be with your other accounts. May not make much difference to you except in eventually streamlining your paperwork a bit.

RDW
*hates being deluged with extra paperwork, LOL
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RainyDayWoman, I guess we've done all we can-- both of his IRAs are at Vanguard, as is mine. His employer 401K is somewhere else and his individual 401K is at TRowePrice (Vanguard doesn't offer). I love Vanguard's tools as far as checking asset allocation etc. thanks

You should call Vanguard and see if there are any services that you qualify for with the amount that your household has there. I think they recently updated their levels and what they qualify for, but when I didn't have a lot more than you at Vanguard, I got a free financial plan, with an annual review, plus I have a free portfolio tool that allows me to link other accounts, like my 401(k) (Fidelity), my ING account and the bank where I have my checking account. That way, I can look at the overall totals, include the allocations.

AJ
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We too have multiple IRAs. I use an Excel spreadsheet I created to track asset allocation. I simply sum dollar amounts in similar classes of assets, e.g. domestic stock market, over all acounts, e.g. IRAs. I prefer index funds, so my asset classes are:
1. Domestic stock market
2. Small-cap value
3. International stock market
4. Emerging market
5. REITs
6. Short-term bonds
7. TIPS
8. Money Market

By summing 1-5 and 6-8, I get the basic equity/fixed income split, and that can be further analyzed by summing 1-2 to get domestic stocks, etc. It's easier than it may seem in reading my post. Given that we're retired, I like to do lots of projections as part of my spreadsheet. My spreadsheet compares actual allocation with my target allocation, thus indicating direction for future funds, and when rebalancing mght be appropriate.

The bulk of our funds are at Vanguard, and, if you provide them with non-Vanguard fund information, they will update your entire portfolio, show your asset allocation, and track your internal rates of return for 1, 3, and 5 and more years. IRR is a tricky calculation.

Vanguard does the heavy lifting, but spreadsheets are fun and informative. I use Quicken as well, but rely more on Vanguard and my spreadsheets.

db
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His employer 401K is somewhere else and his individual 401K is at TRowePrice (Vanguard doesn't offer).

He can roll the Price account into the Vanguard traditional IRA, assuming Vanguard doesn't impose some sort of restriction because it had SEP contributions. There's no such animal in tax law as a "SEP IRA."

Phil
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I would love to find a way to combine them

Mostly, you can't. Combine them, that is. He could maybe roll the SEP into a traditional IRA and also roll the old 401k into it, too. Of course, you cannot combine yours & his together--the clue is that the "I" in IRA means "Individual".


get an overall picture of how we're allocated
This question tells me that you (as are most people) don't understand what's going on. The IRA isn't the investment. It's the account that contains the investments. You need to look at each account and see what investments you hold. That is how to see how you're allocated.

Don't feel too bad about the number of accounts. Actually, you don't have enough accounts!!! You should have a Roth IRA, too.

FWIW, we have 7 retirement accounts:
his 401K
her 401k
his IRA
her IRA
his Roth
her Roth
his inherited IRA

...on Post-it notes.
Do you have Excel? If not, there are free spreadsheet programs available. Just put all the data into a spreadsheet.


...get overall picture of ... how we're performing, etc. ...
There's a simple way to simplify the management of your retirement investments. As an added bonus, it's alse a very very good way.

To wit, invest 100% of each account in an S&P 500 index fund.

don't know if this matters, but our ages are 40 and 44
It does matter--but only a little bit. It means that you should be 100% allocated to equities (S&P500) and nothing allocated to bonds or other fixed income things.

BWDIK? I only retired at age 58 with my investment accounts paying me more than my previous salary.
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Ravyt,

To be clear, when I said I would love a simple way to see how we're allocated, of course I meant "across accounts held by different people in different places."

My most recent analysis revealed that we are about 96% invested in equities, almost all index funds-- about 45% large cap, 25% midcap, 8% smallcap, 22% foreign. The other 4% is invested in a triple tax-free fund where we are parking some money in the event we find a great new home to buy. We currently own an apartment in NYC and a weekend home with $750K in equity between the two. The current market is creating some opportunities and we might try to buy a bigger apartment.

I never learned to work with spreadsheets (always had an assistant, and I didn't appreciate them enough!) but I guess I will have to learn. It's annoying to have to check each individual account, look at the underlying investments, compare them to investments held in other accounts, etc. to make sure we're not overweight here or underweight there....

However, notwithstanding my clumsy "scribbling on scrap paper" system, I do understand at least a teeny-tiny bit of what's going on.

Congratulations on retiring early. We expect to do the same. Actually, I am already not working--I stay home with our 2 year old. She likes to run off with my Post-it notes, which contributes to the problem.

Thanks to all-- I'll keep watching this thread so if you have anything to add, please do so.

best,
Courtney
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.....To wit, invest 100% of each account in an S&P 500 index fund.....

Index funds are great, but this is a potential problem since it is 100% large cap US stocks and you have very little diversification.

They go under various names but you should look for something like a "Total(US) Stock Market Index" fund to get the exposure to smaller stocks for more diversification if you don't want to have several different index funds.

It would also be hard to recommend having less than 20% of the stock portion of your portfolio in international stocks, some people can make a good sounding argument for having a much higher percentage in international stocks.

Greg
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.....However, notwithstanding my clumsy "scribbling on scrap paper" system,.....

A lot of investing really has more to do with psychology, than accounting.

It could be that not having a sophisticated portfolio tracking system works well for you and that getting some super duper system were you can check your portfolio five times a day will cause you to make bad choices when the stock market periodically goes crazy like it does from time to time. For some people just checking and rebalancing their portfolio a couple of times a year is a good way to go.

Greg
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It's annoying to have to check each individual account, look at the underlying investments, compare them to investments held in other accounts, etc. to make sure we're not overweight here or underweight there....

No need to overthink things here. As long are you are reasonably diversified, the weightings don't matter very much. No reason to run yourself ragged over things that are insignificant.
Your distributions look fine to me. I thought that you were invested in individual securities. Those take a lot more work to closely watch them, as opposed to index funds which you rarely need watch.

Anyway, for a convenient portfolio tool, try my.yahoo.com. You can set up separate portfolios, or you can set up one portfolio with the combined investments of each of your accounts.

It's easy to use an Excel spreadsheet. 99.9% of what you need to do is very simple to do in Excel. See if you can find a book like Excel for Dummies, and spend a couple hours with it. The remaining 0.1% would be to make Excel automatically download quotes. I've never bothered to do this, but even this isn't too hard.



...our 2 year old. She likes to run off with my Post-it notes, which contributes to the problem.

My primary record keeping system is spiral notebooks. You can buy them for 49 cents each. My notebooks have never had a data corruption from a disk crash, or a Blue Screen of Death. ;)

With the above system, I've managed a portfolio with about 300 trades a year for the last 10 years.

...retiring early. We expect to do the same.
There's nothing like looking over the financial records with your spouse, and looking up at one another and saying, "Why are we still wasting out time working, when our annual investment gains are more than our annual salaries?"

Ray
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There's nothing like looking over the financial records with your spouse, and looking up at one another and saying, "Why are we still wasting out time working, when our annual investment gains are more than our annual salaries?"

Some people like to work.

IF
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Let me just say that I find it astonishing that you have so much money (at least in the eyes of this country bumpkin) and are worried about spending some money on financial planning.

If you had 15 grand, I would say "cheap or free" is a great criteria -- who wants to blow 2% of their portfolio on a subscription? But you have over $300,000 in the bank. $300 in subscriptions/fees/software would be a pittance, and could pay you back many times.

I would look into consolidating all your accounts with one brokerage (with the exception of the current employer 401K). In the process, his two 401(k)s could be merged into one rollover IRA. The Roths (his and yours) would have to be separate accounts, but if you can view it all at a glance, you're still good.

I also use Fidelity. Love the portfolio analysis. It lets me look at my Rollover 401(K), my Roth and my SEP individually or together. I can also have the tool analyze other accounts (wife's, bank accounts, etc.). There's also a retirement planning tool which gives you a pretty good idea where you stand, and you can choose to include any or all of your assets.
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There's no such animal in tax law as a "SEP IRA."

Hmmm. From Wikipedia

SEP-IRA

A Simplified Employee Pension Individual Retirement Account is a variation of the Individual Retirement Account used in the United States.

Also, IRS pub. 560 refers to it that way multiple times. Am I missing something?

Guby
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There's no such animal in tax law as a "SEP IRA."

Hmmm. From Wikipedia


Note I said "tax law," not "Wikipedia."

SEP-IRA

A Simplified Employee Pension Individual Retirement Account is a variation of the Individual Retirement Account used in the United States.

Also, IRS pub. 560 refers to it that way multiple times. Am I missing something?


Note that you will find nothing in Pub 560 that puts special restrictions on a SEP IRA once allowable contributions are made. IRS pubs may use all sorts of terms, such as "spousal IRA," for ease of discussion, but that doesn't mean that such term exists in the law.

In law a SEP is simply a method, among several, of getting money into a traditional IRA. Once it's there it behaves as any other traditional IRA account. The same goes for a SIMPLE once it's been around 2 years.

I've had but one traditional IRA account at a time, and it's received both regular and SEP contributions.

Phil
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Note I said "tax law," not "Wikipedia."

True enough, but shows the term is in use. I'm not sure that whether they're in tax law is all that important to most of us, though.

In law a SEP is simply a method, among several, of getting money into a traditional IRA. Once it's there it behaves as any other traditional IRA account. The same goes for a SIMPLE once it's been around 2 years.

Thanks for the clarification. I never had a SEP or SIMPLE, wasn't really sure how they worked.

Guby
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To be clear, when I said I would love a simple way to see how we're allocated, of course I meant "across accounts held by different people in different places."

I'm pretty sure Microsoft Money or Quicken will do this for you. You can check if your various retirement account companies support electronic access with them first, but most do. Once you've done that you should be able to get clear pictures of your investments across all sources, do some simple projections and lifetime planning, etc. They cost $30-60 for the software based on what version you get. Money has a 60 day download trial which would be a good start. Quicken has no trial but a money-back guarantee if you don't like it.
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Phil, if I'm understanding you, you're saying that SEP is a type of contribution rather than a type of IRA? I think my husband opened a separate account but was this unnecessary? Are we safe in combing the contributions at this point?
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Phil, if I'm understanding you, you're saying that SEP is a type of contribution rather than a type of IRA?

Correct.

I think my husband opened a separate account but was this unnecessary?

From a tax law perspective, yes.

Are we safe in combing the contributions at this point?

Yes. Note that some custodians will not allow you to make SEP contributions to an account that isn't labeled as a SEP. That's their bureaucracy, not the gummint's.

Phil
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