Ira

[Nanp6]

I have multiple 401k accounts.  I am over 72 and required to take minimum distributions.   Should I roll these to ira?  If so, how do I decide where to move them?  Do I need a financial planner to assist with my decision on where to move my money?

[Bsch4477]

Most people roll over their 401 k to an IRA. Having one IRA makes things simpler. You can choose from many financial institutions like Vanguard and Fidelity and many more. 

[Nanp6]

What are the advantages other than convenience?

[dmertz · Accepted solution]

Any RMD required of the 401(k) must be completed before any other amounts are permitted to be rolled over from the 401(k).  Rolling the money over to a traditional IRA will not change the total amount of RMDs from 401(k) accounts and IRA accounts combined, but it might make managing your retirement accounts a bit easier.  As Bsch447 mentioned, you might have different investment choices depending on the account holding the retirement funds, so that would be the main consideration.   A financial planner might be able to help with that, but beware of the motivation for such a planner's investment recommendations if the planner is gets paid via commissions on the investments.

Another thing to consider is whether or not it makes sense to convert some portion of your retirement savings to Roth where you might pay more tax now but less tax later for a net overall reduction in tax liability.  With substantial amounts of tax-deferred savings, it can require careful planning over the rest of your life to realize the deferred income in a tax-efficient way.

[Nanp6]

Your response is helpful. All 401k are thru employers so roll over not an issue.  I did not know I had to take RMD first, so thank you.  Rolling to Roth is an issue for me due to some property tax freeze advantages I currently have based on income.

[Nanp6]

I should mention that I am retired and income is from social security and pension plan.

[VolvoGirl]

One thing that it would be good to roll over a 401K to IRA is then you can make a QCD Qualified Charitable Contribution from a IRA (after taking any RMD).  Then it won't be taxable.  See pub 590b

https://www.irs.gov/pub/irs-pdf/p590b.pdf 

[Opus 17]

---

@Nanp6 wrote:

What are the advantages other than convenience?

---

The main advantage I see in keeping your money in the 401(k)s is that the employer is often able to negotiate lower cost funds.  For example, your 401k might be able to buy the "Institutional Class" of ABC fund with an expense ratio of 0.2%, while in your IRA you can only buy the "Investor Class" of ABC fund with a 1% expense ratio.  The lower cost fund will give you more net growth in the long run.  On the other hand, some 401k plans limit your investment choices—that can be good, because your employer probably won't allow you to invest in shady fly by night schemes, but it can also be bad because you might not be able to invest in something you really want.

Combining (rolling over) all your 401k plans to a single IRA can be convenient and can give you many more investment choices.

There may be one or two other legal wrinkles you want to think about.  Because a 401k is treated as a "pension" under some laws, it may have advantages.  For example, a 401k is fully protected from bankruptcy proceedings, but IRAs are only protected up to a set value.  

You might want to do some reading or check with a financial advisor.

[Nanp6]

Thank you as this is very helpful also 

[dmertz]

Regarding making a QCD, the QCD can be your RMD from the IRA.  No need to take an RMD before making a QCD.