Consolidate Your Investment Accounts: So Boring, So Important
Hi Friendos,
It’s May already, and I finally tackled a finance chore that’s been pending since January. My spouse had a retirement account from an old job that was ready to be rolled into his IRA, to help him (1) avoid administrative fees of around $400/year, and (2) reduce the number of financial institutions he dealt with.
Last year I wrote about “account entropy” and gave 5 reasons why streamlining your accounts, aka not maintaining the Museum of Old Accounts, is worth the effort. I wrote, “Your financial plan can include a statement like this: “Stephanie will consolidate accounts at financial institutions unless there is a current reason to maintain multiple accounts. She will consider account consolidation annually, when reviewing her asset allocation.”
Well, I did it! In January I reviewed my list of accounts, and that of my spouse, and his old 403(b) got a target on its back. Last week he called them to begin the rollover process to move his money from the old 403(b) to a traditional IRA.
First step: navigate through a phone call to request the required paperwork. We checked, and this could not be done on the website, perhaps because…well, if you move your money to another financial institution, the old one stops earning fees! After about a week of saying we should tackle this, we finally had an evening when we could sit down to make the call.
The representative said several things that were intimidating and overly complicated. Instead of asking, “Do you still work at [Old Employer]?” they said “Are you fully separated from the plan?” I knew what “separated” meant in this context, but that’s only because of my professional background. The rep issued a scary warning about taxes that was totally inapplicable because my husband was not doing a Roth conversion, which is not part of a standard rollover. My husband said he was rolling his funds into a traditional IRA, and the rep warned that after-tax dollars could not be moved into a traditional IRA. I was sitting there and jumped in, “He doesn’t have any after-tax dollars in his account, isn’t that something you can see on your end?” We got through that and continued on.
It would have been so easy for someone on our end of the call to hang up before obtaining the rollover paperwork because the representative caused them to think, “I’d better research that before I do anything else.” And then get stymied in the process. If this is you, don’t hang up! Keep asking the rep to explain things to you so you can answer their questions and continue through the process. Never believe that you are at fault or inadequate for not understanding something they say: often, they intentionally use difficult language and the process is designed to be hard for you. It is NOT you, it is the system.
Our next steps after the phone call: print the forms (done), my spouse signs the forms (done), notarize the spousal consent pages that I sign in front of the notary (done), scan the forms (done), upload them back to the website (done). I have such appreciation for Sajit at Ballard, my local pharmacist who is also a notary and only charges $2 per page notarized.
It would have totally thrown me if I hadn’t already known about spousal consent and waivers for retirement plans. Under federal law, if you are married, you sometimes need your spouse to sign off on things related to your 401(k), 403(b) or other type of retirement plan, as this article explains. So, now you know and won’t be taken aback if you encounter this yourself.
We’ve completed many steps in this tedious process, and it is still not done. We need to make sure the paperwork is correctly processed and the money actually moves from one account to the other. This involves a paper check sent in the mail! But I know what it means for our financial lives to have a manageable number of accounts, so I decided this was the month to tackle this important chore. If you have more accounts than you need, make May 2026 the month you eliminate one of those. It will feel so good to cross that off your list.
-Stephanie
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