Consolidate for a clear retirement picture
Accelerate your retirement savings, roll over and consolidate your existing assets — and gain a more unified financial strategy for retirement.
Some investors think that to have enough income in retirement, all they need to do is save more money. But it’s not just a case of how much you save — how you save is also important.
One effective way is to take advantage of retirement savings accounts, such as your employer’s 401(k) if one is offered and an individual retirement account (IRA). These accounts can offer tax advantages and a way to save consistently over time.
The case for consolidation
If you have IRAs and 401(k)s scattered among a variety of employers and financial institutions, talk with your financial advisor about consolidating your accounts with Edward Jones.
Consolidating your accounts is a great way to ensure you’re getting the most from your money, and you’ll be able to see the “big picture” of your retirement savings more clearly. This can also help eliminate conflicting advice from multiple financial advisors.
Here are three other benefits to consider:
Help reduce fees and paper
Investing through multiple providers may create more in transaction costs and expenses, as well as more statements and tax documents.
Diversify your portfolio properly
As changes occur in your life and in the markets, your investments may not always be able to keep up. Consolidating your investments with one provider can make it easier to keep your asset allocation on track and make changes as necessary.
Develop an appropriate retirement income strategy
You want your retirement income to last as long as you need it. A financial advisor who can see your full financial picture can help you set up a withdrawal strategy that works for you.
Contribute to an IRA for additional tax savings
An IRA is a great way to save for retirement. It can serve as a complement to your 401(k) (be sure to get your match if one is offered) or provide a tax-advantaged way to save when you don’t have one through your employer. You can also put almost any investment — stocks, bonds, mutual funds and so on — into an IRA, so you can create a portfolio that matches your needs, preferences and risk tolerance.
With a traditional IRA, your earnings grow tax deferred, and your contributions can be tax deductible, provided you meet certain income requirements.
A Roth IRA works the opposite way: Your contributions are not tax-deductible, but your earnings can potentially grow tax free. You must meet certain income requirements to contribute to a Roth IRA. However, there are ways to add money to a Roth IRA and reap the benefits, even if you are over the income limits. Ask your financial advisor about Roth conversions.
Because qualified distributions are tax-free, Roth accounts also offer the following benefits over traditional accounts:
- A higher effective contribution limit
- Greater certainty of income and taxes in retirement
- Enhanced flexibility to manage taxes and Medicare premiums in retirement
- After-tax inheritance for heirs
Given the benefits Roth accounts provide, we generally believe you should consider allocating at least some retirement assets to a Roth account. However, the amount and timing of your Roth contributions depend on your goals and preferences, current savings mix, time horizon and current and future tax rates. Check with your tax advisor and Edward Jones financial advisor before deciding which IRA may be right for you.
View your IRA contributions to date
| Tax year | Contrbution limit (under age 50) | Contribution limit (age 50 or older) |
|---|---|---|
| 2025 | $7,000 | $8,000 |
The good news is that each year, you have until the tax deadline the following year to make your contribution — for example, you can contribute to your IRA for 2025 until April 15, 2026. But keep in mind that contributing earlier in the year allows you more time to benefit from potential growth. By waiting until the tax deadline to contribute, you miss out on a year’s worth of compounding.
In-service rollover: A way to consolidate sooner
With some 401(k) plans, if you’re 59½ or older, you can roll over part or all of your assets to an IRA even if you’re not changing jobs or retiring. Known as an in-service rollover, this option gives you greater flexibility over how you manage your assets.
An in-service rollover can offer access to:
- More investment options, which can be beneficial as you approach retirement and prepare your portfolio to meet your retirement income needs
- Personalized financial and investment advice for those assets
- Features that may be unavailable in your plan, such as the ability to convert your assets to Roth
Keep in mind that not all 401(k)s offer this option. You’ll need to discuss any restrictions on withdrawal amounts, the number of withdrawals you can take in a year, and any service and age requirements. Also, there are trade-offs to rolling over your 401(k) to an IRA. Your financial advisor can help you understand how this provision works and work with you to determine whether this strategy matches your retirement goals.
The bottom line
However you decide to save for retirement, it’s important to make the most of your opportunities. Your Edward Jones financial advisor can work with you to evaluate your options. Together, you can set up a retirement strategy that aligns with your income needs today and after you retire.
Contact your financial advisor today.