How to Juggle Multiple Investment Accounts

Do you have accounts scattered everywhere?

If you’re like me, your assets are spread among several investment accounts: your 401k, IRA, two normal brokerage accounts, a handful of CDs, a few savings accounts … this list goes on and on. How can you track and manage it all?

Your Goals: Categorize…

First, label all those accounts with specific savings and investment goals. (Even if you just affix a label in your own mind.)

“But wait,” you say, “what if I don’t have a specific goal for a particular savings account or a random CD?” No problem. Label them with goals anyway.

For example, your savings might serve several purposes: to tide you through a job loss, to help you pay for unexpected medical bills, and to buy big-ticket items like a washing machine or tractor mower. So label two accounts: “Big-Ticket Item Fund” and “Emergency Fund.”

Putting a clear label on something can make it seem more manageable. And there’s a second advantage to this exercise: you’ll be able to identify differences in the terms and conditions of each of your accounts, like the interest rate, fees & charges, and miscellaneous headaches like withdrawal charges. Make sure you’re getting the best terms available for each product type.

…Then Prioritize…

Investing isn’t just about setting goals, but also prioritizing them. When it comes to your long-term financial objectives, retirement should be first and foremost. Scrutinize your IRAs, 401(k)s and any other retirement funds. What else could you be doing to optimize your retirement savings? Are you making the most of your 401(k) plan’s matching levels?

Next, note whether your investments for other goals are held in the right accounts. Are you saving for your children’s future college expenses? If so, make sure that those funds are in a tax-advantaged arrangement like a 529 college savings plan.

Make the administration of your traditional taxable accounts as simple as possible. You may need more than one general investment account. In many households, for example, the spouses or partners have one joint investment account, but also maintain separate accounts for themselves, plus trust accounts for their kids. That’s fine – but again, label and simplify where possible.

We know that having multiple investment accounts is common. Many people have several 401ks, some of which are left with previous employers. They may also have additional IRA or taxable brokerage accounts, on top of their 401k’s. Again, that’s fine. (In fact, it’s great that you’re investing so much!)

The most important thing to remember, though, is that you should manage across all your accounts as though it’s a single pool of assets. (Because it is.) This will help you achieve the best asset allocation – which reduces volatility and helps you lock in more money for retirement.

Services like Jemstep’s Portfolio Manager can help you manage your investments across all your accounts. It makes recommendations based on the tax structure of your accounts, your personal goals and risk tolerance, and other important factors.

… And Always Strategize

People with multiple accounts often lose coherence in their strategic approach. Your investment choices should reflect your goals, your risk tolerance, your timeline, and other specific factors, like how much liquidity you’ll need.

If you’re not actively keeping tabs on the strategic considerations for each of your goals, you may be making inappropriate investment choices that could prove harmful down the road.

By labeling each account with a clear goal and then prioritizing among these, you can more efficiently manage the process. This will help you make sure that your investment choices will help you achieve your dreams.

Do you have multiple investment accounts? How do you manage them?