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Americans often find that their retirement savings accounts, usually their largest personal financial asset, can remain with a former employer well after they’ve severed ties. If you’ve transferred jobs more than once, you may find yourself with several retirement accounts at various employers.

Rolling over your retirement accounts to an IRA is usually in your best interest. Not only does this consolidate your assets into one place, making them easier to keep track of, IRAs usually offer more investment options and flexibility than a 401(k). Rolling over to a 401(k) can be a bit tricky, and if you do it incorrectly, you may find yourself paying a penalty.

When you choose to rollover your retirement assets, do some research to decide which brokerage firm you want to move the account to. If you already have retail accounts, you may choose to open your account with the same firm. You may even receive discounts if your assets are over a set minimum account. Ask about fees, including low balance fees and annual fees, and choose an account with minimum fees.

Once you’ve chosen a brokerage company and open the account, ask for a direct rollover. With a direct rollover, the check written with the proceeds of your 401(k) account will be made out in the IRA trustee’s name rather than directly to you. If the check is made out to you, tax withholdings will be kept, and you’ll be subject to a penalty.

Once the money arrives in your new account, you may want to meet with your brokerage firm to decide how to invest your money. With an IRA, you usually have more flexibility with your investment options, so you’ll want to develop an investment strategy. If you have several 401(k) accounts with different employers, you should be able to consolidate all of these assets into one IRA. 

When you rollover your account, you may be tempted to use the assets to pay current debts. Keep in mind that by using retirement assets for current spending, you’ll not only jeopardize your retirement security, you’ll also be subject to tax withholding and a 10 percent penalty.