When I went through a major layoff as a twenty-something, my Dad didn\u2019t hide his concern about my career choice. Advertising, I told him, was simply not going to be as secure as his life as a tenured professor. When I went on to secure a job at the regional phone company, he was delighted. You can work there until you retire, he said, and earn a good pension. Instead, after a few more career changes I\u2019ve collected an assortment of pension plans and 401(k)s. Now I\u2019m my own boss, but I can still be boss of my retirement accounts.<\/p>\n
While the dream of many in the Greatest Generation was a lifetime career at a single company, younger generations think differently. Millennials and Xers see job change as a way to stay fresh and keep their career on a positive trajectory. Baby Boomers like me, out of desire or circumstance, proudly list multiple jobs on our resumes. All this mobility makes the one-page resume as old-school as the vellum it\u2019s printed on.<\/p>\n
After a career of job-hopping, it\u2019s easy to have retirement accounts and pension plans strewn across multiple companies. And it\u2019s tempting to just leave them there. But you may have more choices than you think when it comes to making decisions about your retirement funds. Of course, choices are fun when it comes to donuts, but they can be too much when you\u2019re busy managing a career.<\/p>\n
You\u2019re already doing the right thing if you\u2019ve signed up for your company\u2019s retirement plan and are taking advantage of the company match. If you\u2019re lucky enough to participate in a pension plan, it\u2019s a good idea to know how the benefit works and how many years of service you have or need. It\u2019s also important that you educate yourself about the plan(s) and stay informed of any changes. If the company offers investment options, you don\u2019t have to feel stuck with your initial choice. Several years after leaving my job at the phone company, and after it had changed hands twice, I realized my portfolio was heavily weighted with a single stock. Some diversification was in order.<\/p>\n
If you\u2019ve already accumulated several retirement accounts, you\u2019ll want to look at them from a big-picture perspective. It\u2019s important to see how they work as an overall portfolio, not just as separate accounts or funds. In some cases it may be beneficial to consolidate accounts so they\u2019re easier to manage both now in the distant future. It\u2019s not uncommon for people to accumulate just a few thousand dollars at a company before moving on to the next big opportunity. That money can often be rolled over and combined into another account.<\/p>\n
But this all seems so very complicated, and it might just convince you that doing nothing is fine for now. In fact, there really is no right answer for what to do with your accounts. What you decide to do while you\u2019re still working depends on your current circumstances and your plans for the future. That\u2019s why working with a financial planner makes sense. They will take it all\u00a0under consideration as they customize your investment strategies.<\/p>\n
Whatever retirement looks like for you, whether it\u2019s pursuing personal interests or launching another career, you\u2019ll want to get proactive about your retirement accounts well in advance. There are often decisions to be made as you reach a certain age or longevity at your company. Even before you decide on a retirement date, you can learn about what your plan (or plans) offer and what restrictions they may have. Plan administrators should be available to walk you through your options and the paperwork.<\/p>\n
Again, what you choose to do with your retirement plans depends on a long list of factors that are personal to you. Your financial planner will help you consider your overall financial picture, your family situation, and your risk tolerance. Most important, they will take time to understand your goals for the future to help make sure your plan is aligned with your dreams.<\/p>\n
After working at several companies, supporting a family, going through a divorce, and choosing to work for myself, my financial picture is definitely complicated. But with good advice and proactive planning I\u2019m happy to be my own boss \u2013 and the boss of my retirement.<\/p>\n
Questions to ask yourself:<\/p>\n
\u2022 If you\u2019re still working, are you taking full advantage of your company\u2019s\u00a0retirement plan?<\/p>\n
\u2022 Do you know the rules and restrictions of your retirement plans?<\/p>\n
\u2022 Do you have a clear picture of when you want to retire and what that will look like?<\/p>\n
Action Steps:<\/p>\n
\u2022 Involve your family in your retirement plans to make sure you all share the same vision and expectations.<\/p>\n
\u2022 Be sure you have access to information about all your retirement accounts. If you\u2019ve \u201cleft behind\u201d an account at a previous employer, contact their plan administrator.<\/p>\n
\u2022 Set goals that are realistic to where you are today