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IRA’s (Individual Retirement Account) are very popular these days, but there is often some confusion as to what a person can and cannot do in terms of rolling the account over. This article will examine a few of the common issues associated with IRA rollovers. It is important to understand that IRA rules change often, so the reader is encouraged to check with current sources before making any final decisions concerning his or her IRA.

In most cases, employees have two choices when it comes to saving money for retirement. They can participate in a company sponsored 401(k) program or they may have the other option of participating in an IRA program.

These plans both involve putting money aside (usually a percentage of your income) into a tax-deferred account, but an IRA works more like a personal savings account than the 401(k) programs. With an IRA, when an employee decides to retire, quit, or change jobs, he or she can receive the money saved in an IRA as one lump sum. This is known as an IRA rollover. What the person does with that money is the key to good IRA management.

One thing you can do with the money is to convert it into a more beneficial retirement account known as a Roth IRA. A Roth IRA allows you to borrow against the balance with fewer restrictions than those imposed on a standard IRA. A company-sponsored 401(k) plan, by comparison, places severe restrictions on employee access to accounts.

You do not have to take an IRA rollover even if you retire or leave the company. In other words, you cannot be forced to take the money out of the account. If you wish, the account can remain with the original company until you reache retirement age even if you are working with another company at the time.

For those who want to move their account, most employees have 60 days from the time of termination to re-invest their IRA rollover into a new account or investment plan. There are some issues associated with this, however, so make sure you get expert advice before deciding on what to do.

All IRA account holders should understand that if they elect to keep their account with a former employer and the company goes bankrupt or hits severe financial problems their money may be lost. Keep in mind that often employers change locations over time, and this can make it hard for you to keep up with where they are (and where your money is). By taking the IRA rollover at termination you can transfer the money directly into a new account, reducing your need to keep up with your past employer’s location and financial state.

As mentioned earlier in this article, IRA rules have a tendency to change often and it is your responsibility to keep abreast of what is new and current. If you find that you are facing an IRA rollover, seek the advice of a professional who can show you the options that you have and help you make the best decision concerning where to put your savings.

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Welcome to the second article of my series. This article is about paying yourself first. You could probably find hundreds of articles on the internet about this very topic. It is a common theory used by many financial advisors. It is an important theory that is worth discussing.

The reasons for paying yourself first are easy to figure out, you get to build a savings account, you get in the habit of saving, you build your emergency fund, and more. In my opinion, the most important reason to pay yourself first is to force yourself to live below your means.

If you get in the habit of saving a percentage of your check every week, or whenever you happen to get paid, you will be on a good path. Of course, dont put 10% of your check in the bank and then go spend $2000 on a credit card, that defeats the purpose. Anyone that reads about personal finance probably knows the average American not only has no savings account but they have a negative savings. That simply means they spend more than they make. If they got injured and were out of work theyd have trouble paying their bills for one month, never mind more. The average credit card debt in a household is nearing $10,000. The combination of no savings and increasing credit card debt is financial suicide.

When I used to work in an office people would come to me to discuss finances on occasion. Maybe they needed a new car and wanted to know if they should lease or buy, maybe they had questions about how to invest their 401(k) dollars. There were a number of reasons. But, we always got on the topic of their 401(k) regardless of the initial reason they came to me. I still cant believe how many people were not putting any money in their 401(k) or were putting the amount the company automatically set up for them, 3%. They had no idea what they were invested in, some didnt even know how to log into check their account and find out.

I would ask them how they didnt know these things or why they werent putting in at least the 7% the company matched. Their response, I cant afford it. I would then explain it didnt really change their check much because it was pre-tax, etc The sad part is, if they couldnt afford putting money in their 401(k) you knew they werent saving any money on their own. These people all made over $40,000 a year, most were above $50,000. They were not even paying themselves via their retirement savings.

I wonder what they will do in 30 years when they have a fraction of the retirement savings they could have had. The real question is, can they (or you) afford NOT TO save? If you live your life pay check to pay check when will you ever be able to retire? There will always be a nicer car to buy, a bigger house, better clothes, and fancier vacations. At some point you need to draw the line because if you dont youll have a massive mortgage payment when you hit 65 and you will never be able to afford to retire. After all, you hardly saved any money for your retirement while you were spending all this money.

If you are one of these people that spend every penny you have then at least buy yourself an annuity. You can make monthly payments to it and when you retire you will at least have a guaranteed income for as long as you live. Unless you are over fifty years old you cant even count on Social Security anymore.

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Juggling may be entertaining, but the average person may not have the concentration to keep the balls in the air. Yet half of Americans in their prime savings years juggle their retirement money in three or more accounts, according to Fidelity Investments estimates.

Whether they are 401(k)s from previous jobs or forgotten IRAs, these multiple accounts can burden investors with several statements and potentially more account fees. Most importantly, scattered accounts may make it more difficult to keep a diversified investing strategy on track.

“It’s natural to think that multiple accounts may automatically diversify a portfolio, but that’s not necessarily true,” says Cynthia Egan of Fidelity. “In fact, managing a mix of stocks, bonds and cash across numerous accounts can be confusing and may make it harder to detect risks to your portfolio.”

For example, some investors unknowingly hold the same security in several accounts, which could result in a big hit to the portfolio if that stock price falls. Identifying how much is “too much” is simple with one view of all your retirement money.

Merging multiple accounts into a single Rollover IRA can make it easier to manage your savings, allowing you to easily review your holdings and quickly make adjustments. Here are three more tips to help simplify your portfolio:

1. Find them all. Even if you have to spread your statements across the kitchen table, identify all of your accounts that can be consolidated, including forgotten IRAs and old 401(k)s.

2. Mix it up. We’ve all heard that while diversification doesn’t ensure a profit or guarantee against loss, an age-appropriate mix of stocks, bonds and cash is the key to potentially better long-term performance. Make it easy with a lifecycle fund that is automatically rebalanced by a professional as your target retirement date approaches.

3. Keep it moving. Just like your regular trip to the dentist for a preventive checkup, be sure to review your portfolio annually to make sure your overall retirement strategy stays on track.

Fortunately, there are many resources available to help you manage your retirement savings. At the end of the day, however, consolidating retirement accounts into a single IRA account can help you more easily evaluate your retirement assets, develop a more thoughtful retirement strategy and monitor your investments to build your portfolio – making it easier to keep your eye on the retirement ball.

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Going into retirement is one of the best things in your life. This is the time when you get to relax and enjoy a slower pace of life in peace. However, being able to sustain a lifestyle that is comparable to the one that you had before retirement requires some sound planning. This means that you should either own income generating assets, a large 401 (k) payout or a huge pile of cash that will let you live off interests for the rest of your days.

Another aspect of retirement involves the issue of debt. Being retired also means that you need to be more risk averse. This stems from the fact that you may no longer have the ability to generate income to cover for huge debt or losses. Similarly, high interest credit cards with rolled over balances are often sources of snowballing debt.

With this, you should try to pay off your outstanding credit card debt before you go into retirement. You could try out balance transfers and transfer some of your credit card debt into credit cards that charge lower or 0% APR for an introductory period. This way, you avoid paying for interests while you pay off your credit card balances.

Another method to convert your high interest debt into lower interest debt is through a debt consolidation loan. This way, all your credit card debt will be paid off by your debt consolidation loan. Ultimately, you will just need to repay the debt consolidation loan without having to worry about multiple credit card repayments.

The two methods shown above will only help you reduce the snowballing effect of your credit card debt. However, you will still have to pay off your debt over a period of time. Therefore, the best approach is not to have credit card debt at all. This can be accomplished easily if you set some ground rules for yourself.

First, limit yourself to just two credit cards for emergency use. Pay off any outstanding credit card debt from the other cards and cut them up. Make it a point to not use more than 40% of your credit limit. Overusing your credit card can result to high interest charges and escalating debt. Its also wise to pay off entire credit card balances without rolling over any amount to the following month. All these good habits in managing credit card debt will definitely help you with your finances through your retirement age.

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