How do you plan for retirement if you have multiple employers? Can you combine retirement plans from multiple employers?

A:

Retirement planning for those who work for more than one employer is essentially the same as for those who work for only one. You must still make the same asset allocation decisions and determine your risk tolerance and investment objectives. Of course, you must also compare the investment options and other features that are available to you in each retirement plan. If one plan offers matching contributions up to a certain amount and the other does not, then you should probably contribute at least as much as necessary to get the entire match. However, if the other plan has better investment funds or other alternatives to choose from, then you may want to divert any additional contributions there. However, your aggregate contributions to any type of qualified retirement plan cannot exceed the contribution limits for any individual plan for that year. For example, in 2012 you are allowed to contribute $17,000 to a qualified plan. Therefore, your aggregate contributions to both plans cannot exceed that amount for this year.

It is not possible to combine retirement plans from more than one employer if you are still working for both companies. However, you may be able to roll one plan over into the other if you quit working for one or both of them. If you leave one employer, then you will be allowed to move the assets from that plan into your other plan, provided that that employer's plan document allows it to receive rollover assets (this is usually permissible). You can also roll both plans into the same IRA account after you stop working for both employers.

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