You may have heard the term IRA rollover account in the past. If you have not this is a specialized retirement account that you use to gather funds that you had in previous employers retirement packages. For practical reasons you want to keep the capital and growth revenue separate from your current job’s retirement program, due to the fact that that money can be rolled over into a new retirement program in the future by your employer. You want to be able to control your assets and your interest earned without participation from your new employer.
For example: Bill has three 401(k) accounts from previous jobs that he has held in the past. His current job offers a Roth IRA account as their retirement vehicle in his benefits package. Bill’s first reaction might be to gather those dormant 401(k) accounts and deposit them into his new IRA account. At face value the seems to be like a good idea, but say three years from now the human resources department decides to go with another financial institution that will not permit you to keep adding pretax donations to your current retirement account. They will then want you to roll over your assets and growth benefits that you currently hold, into their new financial investment instrument. This can be detrimental, as you and the human resources department of your company may not know all the vicissitudes of the new plan.
It is fairly simple to open an account to consolidate all your previous 401(k) programs, as you will simply need to find a financial institution that you can open a personal rollover account in your name. This will keep that part of your assets growing, and not under the guise of people that do not have your best interests at heart.
When the time comes to leave your current company that you work for, you will then need to take possession of that retirement fund and combine it into your personal IRA rollover account. This will prevent the financial institution that manages your retirement account from assessing monthly or yearly maintenance fees that can be attached after leaving your current job.. In the end you are the only one that has a true interest in protecting your assets and your interest income, do not leave it up to individuals that are merely there to make a living themselves, and take your hard-earned money in the process. Some people are foolish enough to leave multiple retirement programs laying around in various accounts, as they do not realize the managers that have power of attorney over these funds can do more harm than good at time.
