Consolidating Accounts to Simplify your Railroad Retirement

Transcript:

Are you a financial mess? Are your accounts all over the place? Watch this video on why you should be simplifying your finances.

    Welcome everyone to another edition of the Highball Rises Railroad Retirement Whiteboard. My name's John McNamara of Highball advisors. Today I want to talk about just cleaning things up, so to speak.

    I meet a lot of railroaders that come to me looking for help on railroad retirement, and I'm very appreciative. That's great. What they'll do is they'll send me their information so I can look at it and those type of things, but you'd be surprised, there's accounts from all over the places from here and from there. They go, oh yeah, I have this, I have that. It's all over. What I want to talk about here is kind of cleaning that up just to make everything easier for them. That's what we're trying to achieve here. I just thought I outline a couple things that you can do to help simplify.

    Simplify and organize your financial life. Everything's about trying to make life a little bit easier. What I'm talking about is multiple accounts. I have multiple 401ks, maybe worked for a few different companies, maybe some different IRAs, lot of different brokerage accounts, even bank accounts. I got all these accounts all over the place. Then what happens is you start losing track of them. Time goes by, you go, oh, remember that job I had for three years, well that money's grown. We're just trying to keep track of everything. That's what we're trying to work on here.

    I came up with some action steps, four action steps, just to help you consolidate your financial life. First thing is take an inventory of all your retirement assets, where are all my 401ks, where are all my IRAs, understand all your retirement accounts. Then by doing that, you can prevent the state from going after your retirement accounts. If they're dormant, states are starting to go after this stuff because it's dormant property and they'll just seize it. They'll just take it. If it's just sitting there 10, 20, 30 years, they can go after it. That's why you want to just be active and know where all your accounts are, put ownership on it all.

    Then the next one, as you get into retirement, you can reduce the number of RMDs, required minimum distribution. At 72, you have to go pay the tax man on your tax deferred 401ks. If you have like three, four 401ks and a couple IRAs, you've got to be making all these tax payments and doing all the calculation. That all gets consolidated, it's one RMD payment. That's a great one. Then finally use the IRA to consolidate all your retirement accounts, put everything in there. Great for keeping track, everything's in one account.

    The beneficiary designations are great. You just put down who you want, the contingent, that type of thing, different rules in 401ks, so spouses are entitled with 401ks. Here you got to put down all the beneficiaries. Withdrawal options are very easy to get money out of IRAs, versus going through the 401k mechanism to get money out of a 401k. It's a little bit harder than getting money out of a IRA.

    Then as this said, the single RMD is really, it just makes life a lot easier. Obviously much more investment choices than 401k. 401k has about 20 investment choices. Imagine that, you have three 401ks. Well each one has 20 different investment choices. Then you have to mix and match them all. Here, it's just nice and easy, more investment choices, so that's great.

    Then also simplifying your estate planning. That's really easy because that stuff doesn't... In your IRA, it doesn't have to go into probate. You can just list your beneficiaries, very simple. This money's going here, that's going there and doesn't have to, like I say, go into probate.

    These are the reasons I think that you should really spend a little time, get that rainy Saturday, Sunday type thing, and consolidate your accounts, get all the paperwork together and go through these action steps. It won't take you too long, but I think it will really help you out in the long run.

    I hope you found this video helpful. Feel free, go through the boarding for railroad retirement process, if you're at or near retirement. Very, very helpful stuff. We'll get you all cleaned up here, that's for sure. Please subscribe to my YouTube channel. Really appreciate that. Click on the notification bell to get the latest video. Until next time everyone, please stay safe, stay on track, and take care. So long everybody. Bye.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.