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If I change jobs a lot, should I consolidate my retirement accounts?

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Author's Note: If I change jobs a lot, should I consolidate my retirement accounts?

Young people should not be trusted with their retirement planning. I remember when I opened my first 401(k) account at my first real job with benefits. Despite the helpful pamphlet from human resources, I had no idea how much I should be investing in this thing. "You want to take how much out of each paycheck?" Retirement seemed like a lifetime away, and when I left that job a few years later, it was very tempting to cash in the few thousand bucks I had stashed away under the radar. I owe my father — a consummate and conservative financial planner — a big "thanks" for convincing me to roll over the money into an IRA, which we later converted to a Roth IRA. As I said, young people should not be trusted with retirement planning. Let's hope I remember my father's advice when my own kids get their first 401(k).

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Sources

  • Anderson, Nancy. "7 Reasons Not to Roll Your Orphan 401(k) to an IRA." Forbes. Jan. 24, 2013 (April 18, 2013) http://www.forbes.com/sites/financialfinesse/2013/01/24/7-reasons-not-to-roll-your-orphan-401k-to-an-ira/
  • Brandon, Emily. "New job? What to do with your 401(k)." MSN Money. Nov. 20, 2012 (April 18, 2013) http://money.msn.com/baby-boomers/new-job-what-to-do-with-your-401k
  • Bureau of Labor Statistics. "Number Of Jobs Held, Labor Market Activity, And Earnings Growth Among Younger Baby Boomers: Recent Results From A Longitudinal Survey." Aug. 25, 2004 (April 18, 2013) http://www.bls.gov/nls/nlsy79r20.pdf
  • Investopedia. "Fully Vested" (April 18, 2013) http://www.investopedia.com/terms/f/fully-vested.asp
  • Meister, Jeanne. "Job-Hopping is the New Normal for Millennials: Three Ways to Prevent a Human Resources Nightmare." Forbes. Aug. 14, 2012 (April 18, 2013) http://www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three-ways-to-prevent-a-human-resource-nightmare/
  • Vernon, Steve. "Rolling your 401(k) to an IRA? Think twice." CBS MoneyWatch. May 17, 2012 (April 18, 2013) http://www.cbsnews.com/8301-505146_162-57428555/rolling-your-401-k-to-a-ira-think-twice/
  • Wohlner, Roger. "Avoid Retirement Clutter." U.S. News & World Report. Oct. 12, 2011 (April 18, 2013) http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2011/10/12/avoid-retirement-clutter

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