How to Handle Having Many 401k, IRA, and Other Bank Accounts

Welcome to real financial planning broadcast on WK XL, and available wherever you get your podcasts I'm Matt Robeson and I'm joined as always by Mike Morton, the proprietor of Morton financial advice and the host of financial planning for entrepreneurs, the Mike Morton podcast in addition to appearing in Capitol closeup, that great podcast feed that I oversee Mike welcome

Thanks, Matt.

I love being the proprietor.

Yeah proprietor

Makes me sound so official.

It's an old timey way.

It's like ye old financial planning with an E on the end.

Yes that's right

That's right

Sound financial but it's you're a little bit like Andy Dufresne it's like sound financial planning from a convicted felon.

Um All right.

In our last show, our podcast listeners either in Capitol close-up or, on your pod or on WK XL heard we did a two-part episode and we talked about all kinds of tips and tricks and apps and programs what are like the easy ways to do some of this financial planning budgeting and investing stuff a little bit easier on your own.

And in the course of that we mentioned that whole episode sprang out of a listener question and we'd gotten another listener question which was right on point for everything we ended up talking about.

We're like all right we've got to do a whole show about this.

So here's the listener question It was how many accounts is too many?

And I think I even mentioned in our last episode it's just the nature of work and life These days that most people I would say are gonna end up with a lot more finance related accounts than you'd think you would for various reasons.

And so it it presents a whole bunch of questions and challenges.

All right so that's the topic today First of all, let's do what we always do, we love these listener questions, they're great.

We're getting a bunch of really good ones.

So if you have a listener question where should you email mike Morton?

Yeah email is ,

And you can also go to if you're into social media I don't know the kids are all into

Kids these

days that, Kids these days go to Facebook, go to the beyond politics with Paul Hose and Matt Robeson, Facebook page Just post a question there and we will check it out and try to answer it.

All right Mike So you want to tackle this question

How many accounts

Are too many?

How many accounts is too many You know what reminds me of there's this classic Simpsons episode where Mr.

Burns says to his assistant Smithers how many brain eggs did it lay in your brain And he says frankly sir one is too many Sometimes I feel like that when I'm dealing with my finances it's oh my gosh I don't even want to know

It's there's just one more How many is too many?

It's just one more than you already have

It's I don't want to deal with even one thing I don't even want to look at my checking account Like it never makes me happy So How many is too many

How many is too many.

So it is true.

Matt and I run across this all the time.

Of course, even working for a while.

And you've got a couple of different accounts from old jobs and then, maybe end up with a partner and they've got some accounts.

And so suddenly imagine your situation where there's 5, 10 or 15 various accounts from previous jobs and a different banks and brokerages and stuff is all spread out.

So we did talk about that last time, some apps that can help you try to manage that.

And it is important to get the holistic view across that.

But we end up with a lot of different accounts because so much of it now is put on the American employee, right?

It used to be, a long time ago, you'd have a pension, you'd work one job, your whole career.

They give you a bed.

That's just like laughing.

When I said that we'll just one job.

And they would give you a pension, right?

For your retirement that you put into, you sacrifice your income for that pension.

But today it's got totally flipped around.

So the employee is now responsible for their own savings for the future.

i.e.

You know, retirement, and usually we're skipping around jobs these days don't have that one job.

So you end up with a lot of these accounts.

And my first point is not to feel bad about that.

That's perfectly normal and it's fine to have multiple accounts.

So rest assured you're in good company.

Many people have lots of accounts.

There's no problem with that.

Having all those accounts, the issue becomes as Matt, you said.

That it's hard to understand where everything is and what those investments are when they're spread across different.

Log-ins, you know you've got four different logins and all different account types out behind each of those logins.

And so that's where the issue really hits me is that man, one, you feel unorganized.

And you feel that, geez, I'm not on top of this, because of all these logins and these accounts.

And secondly, it's hard to understand what you're invested in and is that the right mix for you?

For the future?

I just, I'm always leery of giving way too much information because there could be like 20,000 people listening on radio right now look we're in an audience that that in a geographic area that's got 290,000 people, a lot of people not to mention the podcast listeners sometime we'll post all this on video I don't want to give away too much information.

But I'm going to give away a little bit of personal information here because I do want to re-norm this for people a little bit I am not a wealthy man, and I don't think I've had an unusual...

that's all, that's all

relative

It's all relative I'm I've got my health And there's that my knees are falling off but

Except for your knees right

It's like I can't stand up from a chair but other than that I have 14 financial accounts that I'm aware of ,Okay, I don't think I'm a particularly unusual person in this regard.

I've worked a couple of jobs And so for one thing I worked in Congress and I was a federal employee.

So they have a version of a 401k called the thrift savings plan the TSP And it works like a 401k at any other job, you make a contribution they match blah blah blah.

So I've got that and there's a whole set Byzantine protocols to access and find out what's happening over there I have some previous deployments and so there were 401ks with that Now I got married.

A good move.

Great move.

Very happy.

I made that decision.

My wife boy I sound like borat at when I say that my wife my wife also had some previous jobs.

And so she's got a couple of 401ks and now she's working and she's got a 401k right now Now a few years ago, I was very fortunate I got a great job where they gave me an incentive They said if you work here for three years, we'll give you some stock that vests at a certain point.

So there is another account cause that's with a different financial services firm, that's not the one that that I worked with for my other accounts Now when I lived.

in Concord right outside of Concord New Hampshire I worked with a financial planner and ended up with some more accounts right established an IRA and then I had a brokerage account and then I set up some five two nines Now we're living in New Hampshire but for some reason, having to do with taxes, I was set up with five two nine through South Dakota okay.

The place where king Kong puts his big toe that is a piece of the empire state building that I own apparently

I hope it

Didn't well I don't know.

That's the point is I don't even know a cousin of mine who also inherited a piece of this.

There are four of us who are like we all own half a brick and apparently this is worth a little bit of money I don't even know how much, and so I have to go through 15 different financial disclosures to find out So what

Does that have a login where you can look up the value

It would if I could figure out how to establish it it's with yet another financial services firm, there's an account there and I have to figure it out.

Through my cousin who lives in Mexico So the point is, this is just a small taste of sort of the complication and it raises all the issues that you mentioned a moment ago, which is I'm not even really totally sure what are our household assets and that's troubling.

I do my best to track it but am I well-diversified Do I have as you mentioned in our last show is some of this money, like sitting in cash is it sitting in accounts that have high management fees I don't know.

And if I get hit by a bus I have no idea my poor wife will we'll have to my wife will have to figure out what did we own?

I'm not really sure

Yeah she's never getting that quarter of a brick

Well she she might end up throwing it at my coffin so anyway that is my tale of woe.

And if anyone listening identifies with anything I just said that's why we're doing this episode.

So the best part about this episode is that you can feel good about your number of accounts based on Matt's story.

That's perfect

Right if anyone out there does not own a piece of the empire state building maybe that the information about that sits with a cousin who lives in Mexico You're doing great You're ahead of the game.

You're doing great you're doing great So we do want to, as much as possible, I do find simplifying and organizing to be a good process because it helps you just feel better, about your financial situation.

And I really want you to.

Good.

And, by building that understanding and then feeling good about where you are, whether you need to save more or invest slightly differently or whatever it is, at least you will know.

And as I say, knowing is half the battle, so simplify and organize.

What's the name, w who was GI, Joe trying to defeat what was the name of that organization

Cobra

You're right.

If you're trying to beat Cobra that knowing is half the battle you know what the problem with knowing half the battle being the problem is the other half.

The other half you're only halfway there.

It's well you you've lost Hey we want half the battle Good great That's fantastic But it is good to know, I think is your point.

All right So let's talk about some things you can do.

All right.

So you've worked at some old jobs and you got 401ks.

And so they're sitting in that 401k, you were working there, you contributed money.

And you had some login you know fidelity or Schwab or E-Trade, or, it could be some somewhere else that had your, has your 401k and you leave that job and you maybe left for 4 years ago or 10 years ago.

And it's still sitting.

In that 401k under that login, which you've now long forgotten So what you can do is transfer that 401k to a rollover IRA.

Now, remember IRA's are individual retirement accounts.

So Matt yours would be just under your name, Matt Robeson individual retirement account.

And so you can transfer, roll or transfer your 401k money into.

An individual retirement account.

So you could set up an individual retirement account at a new custodian again, fidelity, Schwab, Vanguard, whatever you like, and then you contact your old 401k provider and say, can you please transfer?

You know this money into my IRA.

All right.

Now you can do that.

It's great.

There's some reasons you might not want to do that.

I'll get into that, but for the first step that's great to consolidate.

Hey I had three different jobs.

I got these and a lot of times I find Matt that they're very small amounts.

Hey, I worked at this job for a year and.

I was young, I saved a little bit and there's five grand in there or something.

So that's a good step, to first just consolidate, get rid of that old stuff and put it into your own individual account.

I will say, and I do want to ask you about what you just teased a second ago that maybe there's some downsides I've done this they make it not For the same reason that they make it not easy to quit the gym Hey they're probably how would you say you make money doing this we charged fees they want your money with them.

And so they just, they make barriers.

So anyone with a few hours and a willingness to make some phone calls and write some letters and sign some forms can do this I went through this process for my 14 accounts and I'm like, I'm to clean up all these old 401ks and again not that there's so many of them but there's I dunno I at the time I think there were three or four like all right the clean these up and I'm going to roll them over So the first step that was super not convenient was I had to establish an IRA at a new as you say a new custodian, like a new place that I was going to manage all of this And I had to go through that.

And then, because some of this sits with my wife I want to be able to see these things in one place So there was a whole bunch of other forms to establish that we can have one line So that we could see in one view everything that was under her name And my name and that we're married and et cetera And then as you said I have to contact the old financial services firm They all have their own individual process There's not a universal form And so you've got to go through signing that.

And after I went through this was multiple days of setting aside an hour here an hour I just got exhausted and I stopped and I haven't picked up the process since and it's been like three or four years So am I bumming people out here I don't mean to bum people out but.

No Matt.

You're making people feel good.

They're making a lot more progress than you are, so that's great.

So I will say this the other thing you can try, I've heard this and I don't know if you can do it or not, but contact when you open up the individual retirement account at fidelity or Vanguard or wherever it is, Schwab, any of those or whatever brokerage you want to use.

You can talk to them directly and say, I'd like to open up this individual retirement account, this IRA, because I want to roll this old 401k into it.

Can you help me with that process?

And I've heard really good stories that you get somebody on the phone again, because they want your money.

The new place wants your money.

They're like, sure, we'd be happy to help you.

And they will actually do some of the legwork to figure out what forms you need and all that stuff at the 401k.

For you.

So you might be able to get some free help with the new custodian that has your IRA because they're, they want your money as well So I just throw that out there like try that out

Funny you should mention, Yeah I mean I've kind of come clean about the fact that I worked with Vanguard before so I'll just go ahead and call them out Um I don't think I'm making myself more hackable In fact.

Remember you don't have any money anyway so no one's going to hack

I'm a terrible thieving target I just I know.

it's it's the juice isn't worth the squeeze but um I don't know Maybe there's some advantage to like you know you have to go through if it's hard for me to hack into my own accounts Can you imagine But anyway Mike your point is right Um I remember very distinctly I did exactly what you just advised.

And I called up Vanguard and I said what you just said I trying to move this over they told me the form They they told me how to fill it out, where to send it.

And then I called up the old people and I said all right I'm sending you this form And I had like three or four back and forth calls with them And then I called Vanguard back it was a pain in the butt but there was some help

Yeah Now there's a couple of different ways to do this transfer the way we're just been discussing about it is called trustee to trustee Transfers.

Okay.

So it's going from your current 401k, which is a trustee that they're, managing that money to the new individual retirement account.

And they're a trustee wherever you set that up.

And so you can do, there's no limit to how many of those you can do.

And I recommend, I definitely recommend doing it this way, trustee to trustee, or it's called direct rollover.

And the reason I recommend is because.

Then those parties are responsible.

It's why there is a lot of paperwork they're responsible for making sure everything happens correctly.

All the money gets over there, et cetera, et cetera.

And so you don't, you never have the actual money cause you remember this is in probably a tax deferred right?

It's in your 401k.

So it's a tax deferred account.

And so is the individual retirement accounts.

You want to make sure these things are set up correctly, the same types of.

In fact, I should mention that if it's a tax deferred 401k, which is very typical, you haven't paid taxes on that $50,000 yet that's in there.

You want to transfer it to a rollover IRA, which has the same tax consequences.

You don't want to roll it to a Roth IRA because then that'll be a taxable event.

Now you might want to roll it to a Roth IRA.

You might want to do a Roth conversion, but be aware of what you're doing.

401k is are tax deferred, go into your rollover IRA, call the institutions, do trustee to trustee transfers.

Now there's another way you can do this, which is you can take control of the money.

So you can call that old 401k provider and say, send me a.

For my $50,000 and it will arrive in the mail $50,000 check.

And then you walk over to the new institution or you send it to the new institution and input it into your rollover IRA.

You do a deposit of the $50,000 check into your new rollover IRA.

Now, the reason I don't like that so much is what happens if something happens to that check, you forget to do it.

And if you don't do it within 60 days, Then you have tax consequences because you pulled the money out of your 401k, depending on your age and other situations, you're going to get taxed on that money.

There could be penalties involved.

So I really don't like that way of doing it.

But in certain instances it might be the easiest, simplest thing to do.

Just grab the 10,000 bucks, have them send you a check and then quickly go and deposit it.

Now you can only do one of the.

In a 12 month period.

Okay.

So you can't do a whole bunch of those.

So there was a lot there, but really just stick with the trustee to trustee doing the direct transfer if you can

Or I could do it the other way And if I do it that way I could accomplish all of this in about a decade which is you know very exciting for me You know I'd love to just kind of zoom out on this for a second, because I think the mechanics of how to do it are really important but I don't want to lose sight of the why of all of this I mean You know It was interesting, totally off air you and I were chatting a couple of weeks ago and it's funny like this was before we even got this listener question of like how many accounts is too many which sort of comforting to get because it's like wow Other people worry about this too And I was saying like, oh man Mike I got to admit something to you I've got like a lot of accounts and I'm thinking of trying to consolidate them and you surprise me You're like I I'm not so sure that you need to do that I don't always advise my clients to do that so so why would I want to consolidate and why would I maybe not want to consolidate

All right.

The reasons to consolidate or what we said at the top of the show to simplify to organize to get a better view Um And just to simplify your life.

The other reason is often your investment choices within the IRA will be more than within your 401k So 401k is only have you know you're used to this.

You can pick out 20 or 30 different things in your individual retirement account.

You can get them the gambit of stuff.

All right.

That's another reason other reasons you can even go further like your IRAs, if you're getting close to retirement, or if you've built up a lot of them.

In your 401k is you can put it in IRAs.

You can even invest it in crypto, within your IRA.

You can invest it in real estate.

You can have an investment property, like you go out and buy an individual house using your IRA.

Okay.

So there's other things you can do a lot more flexibility with the IRAs than within your 401k So that's the reason to do it.

The reason not to do it is I have a lot of That liked to do the backdoor roth contributions

Remind

us real quick about backdoor

Roth okay We've yeah.

We've talked about that.

The backdoor Roth contributions, if you don't have any individual retirement accounts okay You can contribute a dependent you know and you make a really good income.

You're not allowed to contribute directly to a Roth IRA.

You're in, you hit the income limit.

You're not allowed, but you can contribute to a traditional IRA.

And then you're allowed to convert the traditional IRA into a Roth IRA.

And in this case, since your income is so high, when you contribute to the traditional IRA, your $6,000, you cannot take it off your taxes.

So you've already paid taxes on the 6,000 in your traditional IRA.

So when you transfer it to a Roth IRA, you don't owe any additional taxes.

And now you have 6,000 in the Roth IRA.

So even though I told you.

You couldn't contribute to a Roth IRA.

You still managed to get $6,000 into a Roth IRA Okay Now that's called a backdoor Roth and there's all kinds of episodes and information we have on them But the reason why the 401k is here comes in.

I said, if you don't have any other IRAs, then you can do the clean backdoor, which is what I just described.

No extra tax consequences.

And you get your $6,000 into the Roth IRA.

But if you rolled over previous 401ks and now you have a hundred thousand dollars in your IRA, your traditional or rollover IRAs, then you cannot do that.

Clean no tax consequence transfer.

So you can not put in $6,000 and then transfer the 6,000 to the Roth When you do that you're going to owe taxes because you combined all of your IRAs balances, I don't want to get into details but at this level the reason I responded to Matt like Hey, it might not be a bad ideas One I'm not too concerned about old 401k But that's part of my job.

Like I deal with accounts all the time, so it doesn't bother me too much seeing like a lot of different accounts.

But for this one I have a lot of clients that liked doing this clean backdoor Roth Uh And so we want to keep money in a 401k instead of your individual retirement account

And so and just kind of very broadly is there truly a downside like let's say for listeners out there who maybe are unsure if this whole backdoor Roth situation might apply to them maybe they just don't even have the wherewithal kind of go through that whole process It's like my gosh I can barely go through the startup process to even consider what they want to know I think How worried should I be about the current state of affairs What's your sense of that

Having having like having a lot of different accounts should you be concerned it

Yeah, if you've got uh 10 14 accounts is that by its nature bad

No no I wouldn't That's why I say like it doesn't matter and I'm not worried about it at all.

What happens though, is that when you look at the investments and start adding them up across all the different accounts into that one big pie picture that's when you realize a lot of times, oh, I'm not being aggressive enough and being too conservative because each time you made an individual 401k choice, you were at a different stage of life.

Maybe we're a little conservative every time.

Or maybe a little too aggressive every time.

And now you just don't realize how that's compounded over time.

And that gets back to the organization and understand the investments But to your question, am I concerned about having 10, 15 accounts no not at all.

Would it then be fair to say that if you have that many accounts as a basic thing at the very least even if you're not going to roll them over a good step as if you're worried about it right Like or you know or a good step to just control those those downsides of having that many accounts is to at least make sure that You've updated and have some kind of online you know you can log in and view what's in the and you can understand what the settings are So I'll give an example When I mentioned when I worked for the federal government I started working.

So I have no complaints but I can't even remember and tell you how I have that division and that division that I set I don't know 20 years ago based on a whim and a conversation with the guy sitting next to me is still how I have that allocation going And maybe it makes no sense So I all of this kind of like feeds into a question to you It's like is there still a little bit of homework to do for people who have a lot of accounts and they've heard the good news story of no that's okay Don't worry about it but you still should at least do The following Is that is that right.

Yeah that's correct You want to do that You want to check and see what everything's invested in, I mean the good news is too Matt Like we've been part of a bull market for like 20 years So I mean that's great that hopefully you chose you know it's hard to mess things up and hopefully at that stage you chose those really aggressive you know all in On the stocks

I don't think I did

You don't think you did so well, you just have to build that a hot tub time machine now.

could go back and change your allocations So yeah you want to look at your your total portfolio make sure the allocations are are good for where you are in life today Um So that makes a lot of sense.

And then the other thing I always look at is the funds available within the 401k's I'll run into this a lot.

They're just not that great.

So more and more like I work with a lot of people that.

People that work in tech.

All right So they work for big tech employers and they're, and those 401ks are pretty good.

And a lot of 401k is now have target date funds, which we've talked about.

I like those a lot as well but a lot of them still have even though they got the Vanguard target date fund They still have these other funds that are very high Right And none of that's kind of right there front and center.

So check your 401k is that you currently have, and we've mentioned this in the podcast before, but here it is, again, you've got four or five different accounts.

You need to go to each of those accounts and make sure you're not investing in a high cost Mutual fund where you could replace that with something more simple Now within a 401k that's really hard And that's the point it's like there's only 20 or 30 choices you know where you're going to move that money in that 401k.

So again, that's a rollover IRA gives you way more choice on where to invest that

Well just to kind of um spike the football on your last point we did a show about six weeks ago about just how much of a difference It could make like a percentage point in terms of fees and costs And I'm not worried about it for the thrift savings plan from the federal government it's it has a lot of the benefits being super large which you know their their management costs are very low I can't remember what the uh what the expense ratio is but it's pretty low It's pretty competitive It's not as low as an index fund that you might get from like a Vanguard I think You know if you're in a target date fund, I think the expense ratio is like 0.08% like some astonishing little percentage I think it's a little bit higher than that If you have the thrift savings plan but it's not outrageous but that difference of 1% you demonstrated that over 20 years that could be 150,000 bucks Well I did not start off with a hundred thousand dollars in there which I think was the basis in your numerical I started with some money in there and it's creeping up on 20 years since I started contributing to that you know the point is I'm 48 years old.

You can't tell if you're I'm so youthful sounding I mean I'm 48 years old I'm still not planning to retire for let's say another 20 And so Right now we can plug right into the numerical example that you gave in that earlier show if any of these assets that are in 401k is in my personal are in these kinds of high fee situations If I intervene right now then I could be getting that extra 150,000 bucks for retirement That's a big deal.

So it seems like if you're going to you could decide or not decide whether to roll those over but at the very least knowing is half the battle in this case Like you really do need to know

Yeah those those percentages make a massive massive difference And not only that, Matt you're saying oh, Mike might, work another 20 years but you'll probably hold that fund for another 40 years All right if You buy it today you know you're not going to completely get out of it a hundred percent in 20 years Right

Yeah you don't know

about my wild lifestyle though I mean

Right you might need that money

Yeah Or or I may not make it that far

That's that's right Well then you don't have to worry about be talking to your kids

Leave

to your kids

It Yes Right They're going to be like Hey you, want to see this brick Um how often is it the case that 401k's I mean you you work with a ton of clients when they're in this situation it would you expect that some of these older 401ks that are sitting around are in a high fee situation

Yes I would Any job that you've had I mean I would review all of them and um just look at the ticker symbols, you can plug them in the internet and to Google put in that little ticker symbol, whatever you're invested in and you're looking for expense ratio probably what it's going to be called So just look for that It's going to be somewhere in the range of You know 0.5% 0.2% all the way up to 1% or even over 1%.

And that's when you're really, in my opinion, running into trouble because a half a percent change in your portfolio over your lifetime for a million dollars just a half a percent of compound interest um over a lifetime So that's a really really big deal.

And while we're on the subject of fees, I don't want to bring up something else.

I was thinking of When we've got multiple accounts, you think about rolling things over and consolidating.

I want you to also be careful of the advice that you're getting and take a step back and make sure it's going to be the right advice for you So I've mentioned some advice today so you know I recommend that it takes a step back is that you know is that right for you and the here's the situation I mentioned this cause I was thinking about it.

Often you'll get advice from places that sound very free I mean obviously we're on the radio.

This is free advice, but some of these , have your money.

Like the local bank account notices that, oh, you deposit a hundred thousand dollars or it's been sitting there for awhile that local bank will give you a call Hey do you?

want to come down and have a free chat about how we can help you invest this for for you Which is great They're going to give you some some good advice, but again, if it's free advice, Just make sure you don't sign anything there.

Just step back and say, what did they recommend that I do.

And does that make sense And particularly when it comes to these fees now people need to get paid You know It's great.

There's good people trying to really help you, but when it's a bank, that person with the free advice they're having a salary and they're often paid in commission Which is fine you know they're giving you some good advice.

They have to get paid.

If you buy that mutual fund, they might get paid a commission.

That's why they recommend it.

Then secondarily your money that's in the mutual fund had these fees They're going to be higher fees because you're getting kind of free advice all along the way So you know and those people have to get paid as well Those managers the issue I have is that that was the way it was done 20 plus years ago when it was really hard to access all this stuff, but everybody knows today you just download Robinhood put your money in there and like a couple clicks later Boom you're all invested And so the technology is changing and what you don't want to be caught in is exactly what we're talking about today where your a hundred thousand dollars in a mutual fund charging for the next 20 years

Right you know I'll give you another application I'm going to turn it into a question but since I've already kind of spilled the beans on my own situation I'll just draw from my own example I mentioned earlier that I had established some five two nine accounts for my kids to save for college and on the advice of the financial institution that I was working with at the time every state has its own five two nine plan these were in a state that I was not living in I eventually, when I moved I was interested in.

Maybe looking at that state And it turns out that you could have specific tax benefits If you're invested in the five two nine that applies to the state you live in, that is originated from the state you live in.

And so Look, there was another pain in the butt that way too much time I had to fill out forms I had to scan things I had to call but it was worth it if you think about it in terms of the net benefit that I got financially I was very well compensated for that time on an hourly basis it was a worthwhile way to spend my time and it was just Worth looking into so it seems to me here's the question part of this that this isn't just for old 401ks this question of what old accounts do you have sitting around that you haven't thought about Could very much apply to all kinds of accounts Very much including five two nines and it's worth thinking about you know what did you establish long ago in another phase of your life And kind of seeing oh maybe, maybe that does need some consolidation or a transfer.

Yeah The five two nine is an interesting one they again are very similar to just the mutual funds that they do have fees they are run by the state.

So each state has their own five two nines And in that states program, they might contract with Vanguard or fidelity or whatever to run the plan Um and so and they have associated with them.

And in fact, I think we did an episode a while ago on five two nine, I've looked at about a half, a dozen different state plans and compared the fees.

And it's pretty dramatic.

It's not nearly as bad as some of the stuff I've seen from 401k is from 20 years ago Like we're not talking 1% but they could be doubled from like say 0.1% to 0.2% And none of that really bothers me so much that's all fine so any of the state plans I'm pretty happy with but I think some are a little bit better you can go and look at that episode I think I like the Utah one and the Illinois one Massachusetts where I am I'm in the state of Massachusetts It's a good plan Fees are very low, not quite as low as those other two.

And so for the state and you do get a deduction off your state income tax for contributions Okay But I still recommend those other plans and here's the reason Matt Cause when you dig into the the state tax deduction you save about a hundred So I'm like well depending on you know you could save a hundred bucks a year If you're contributing to that five two nine every year which is pretty good savings one or 200 bucks you know nothing to sneeze out there.

But for some people they put in like a lump sum and say, I'm going to put in a lump sum and you just let it ride.

In that case.

I more care about the ongoing fees, then that $100 state tax deduction.

Now, to your question consolidation, if you have five two nines, you can move them.

So if you have multiple five two nines.

You can consolidate them.

You can transfer from one, five two nine into another five two nine.

Again, for that simplification organization, just have one login You can do that It's not going to save you anything and find a good.

one You know I mentioned two different states I like, I said pretty good I haven't run across any of that I'm like Ooh that's not So good so that's all fun.

I would just I would organize those.

You can consolidate those You're not going to save anything other than the ongoing And the interface and what you're you know they have investment choices just like 401k's But you're not going to save anything in service, state, tax deductions for moving any of that stuff because that's on the contributions only when you contribute not on the balance.

You know I did want to hold aside just a few minutes toward the tail end of this episode to talk about a topic that we only had 30 seconds to discuss At the tail end of our last episode which is password management so I've heard one thing that you really should do as a piece of homework If you've got multiple accounts just check out especially your old stuff make sure you know where it is before you even Go no go on Do I need to roll it over But the other thing that I heard from you last time is you need a password manager and that's especially true If you've got so many accounts you don't want to be trying to keep track on paper in in some kind of a convoluted way of here's how I access all of these dozen or so things So you recommended a particular one last time.

Do you want to just talk about that?

Yeah, I'm a big fan of password managers and I'm bringing up more And more with my clients to make sure that they use one and For me, it falls under that idea of a state planning.

Or you mentioned that earlier in this show as well.

You know what, if you get hit by a bus, all the accounts Their values but also their logins Right And numbers and all that stuff.

So in your password manager you can enter a whole bunch of stuff And it's great and so I recommend you have a password manager with your family right So you've got So that they have shared login you know they've got your own login but it's shared information in there and you can enter not only your login, but also all kinds of other notes and other information, account numbers and stuff like that.

In there.

And it's a very useful tool under that estate planning.

I use one called 1st password, the number 1, and then password.

I really like that heard good things about last pass and there's certainly other ones out there as well I'm sure they're all great but I just think it's a really useful tool.

Andrew Cunningham And the article is called why you need a password, manager Yes you is the title of it And they actually recommend two services that you just outlined first password which is the number one with word password And then uh the other one is Last pass last pass So um you know both of those seem seem to be a good and you know what's really ironic just like the project of I need to roll over that You note the date on on that article I opened that that I kept it open as a tab in my browser for a long time

The last 3 years

For the last two and a half years And I really promised myself that I'm going to do this but you know this show is kind of giving me a little bit of a kick in the you know what to start with that I think if I do nothing else the password manager part is a good step.

And I I just have a big fan of those password managers for the use of my life, because the best part, Matt is on your phone.

You just hold your finger or face ID and it fills in all your logins And then therefore you have these super long you know 15 digit crazy login passwords that you would never remember, but they're all stored in there So everything becomes way more secure Becomes way easier in your everyday life So I'm a big fan of using.

Yeah well look this has turned into a lot of really great practical advice So I think we've got a wrap here but it sounds like do the homework check, get a password manager and bottom line don't stress having so many accounts is not necessarily a terrible thing Mike Morton thanks so.

Yeah

it

Thanks Matt!

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