Consider consolidating your savings in an IRA

An IRA offers a lot of flexibility when turning your retirement savings into retirement income. If you have money saved in multiple accounts—say, retirement plans from more than one employer—consider consolidating your savings in a single IRA. Even if most of your money is one place, moving it to an IRA can help you manage your retirement income.

Why consolidate?

What's more fun, managing your accounts or enjoying the money you've saved? Every account you maintain means a separate statement, a separate tax form for your withdrawals, and possibly a separate user name and password if you manage your accounts online. Not to mention, each of your accounts could have a different investment mix, making it difficult to determine your portfolio's overall mix.

Gathering your retirement savings in a single IRA gives you a single account to manage. Consolidating lets you see your entire income picture with one glance, and you may have an easier time keeping your investment mix in line with your goals. Also, many financial institutions offer specialized services for high-balance accounts. Consolidating your money may help you qualify for those services.

Vanguard makes rollovers easy. For help consolidating your savings in a Vanguard IRA, call an experienced rollover specialist at 800-523-9442.

Look for low costs

If you decide to consolidate your savings in an IRA, pay attention to costs and fees. Every financial institution has its own fee structure, so comparison shopping can help you keep more of your money.

A Vanguard IRA® charges no account maintenance fee if you sign up for electronic delivery of your statements and other account documents.* In addition, Vanguard mutual funds cost one-fifth as much to own as funds from other providers, on average.**

Action steps

To consolidate multiple retirement accounts balances in an IRA:

  • Choose an IRA provider. Make sure to research costs and investment options.
  • Open your IRA. Many firms offer special services to help you complete a rollover.
  • Decide on an investment mix for your IRA.
  • Request a direct rollover to your IRA for each retirement account you wish to consolidate.

When taking withdrawals from a tax-deferred plan or IRA before age 59½, you will have to pay ordinary income tax plus a 10% federal penalty tax.


*If you do not sign up for e-delivery and are not a Voyager®, Voyager Select®, or Flagship® client, a $20 annual fee applies to each fund with a balance of less than $10,000 in your IRA.

**Vanguard average expense ratio: 0.19%. Industry average expense ratio: 1.11%. Sources: Vanguard and Lipper Inc. as of December 31, 2012.