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Dr. Don Taylor, CFA, advice columnistNo need to move retirement account

Dear Dr. Don,
I have about $96,000 in an account with Morgan Stanley that I rolled over after a company I worked for was sold. I then went to work for another company. I have since left the second firm and there is about $30,000 in that retirement account with Fidelity, but still under the company name. Would it be in my best interest to roll it all to Morgan Stanley? Neither account has grown by leaps and bounds.
-- Vicki Vigor

Dear Vicki,
Consolidating your retirement accounts with one provider can make it easier, and sometimes less expensive, to manage those accounts. But, ignoring for the moment annual fees and expenses, the return on the account depends on how the money is invested, not where the money is held.

The fact that the plan sponsor's name -- your former employer -- is on the Fidelity account is not a cause for concern. I have a retirement account from a former employer that has that employer's name on the account as plan sponsor, and I haven't worked for that employer in over six years and feel no compulsion to move the account. Talk to Fidelity if you're worried about the security of the funds in that account.

Keep an eye on annual fees and expenses, both for the account and in the investments. Paying high annual fees in a mutual fund is a drag on your realized return. Lower-cost options can help you improve your realized returns.

Periodically reviewing the performance of your investments and deciding on rebalancing or reallocating those investments makes perfect sense. In general, people don't spend enough time on these tasks. Take the time to review your accounts; decide whether it's important to change allocations based on your financial and life goals. Bring in a professional if you feel overwhelmed with the process.

Editor's note: Dr. Don has a retirement account with Fidelity.

To ask a question of Dr. Don, go to the "Ask the Experts" page, and select one of these topics: "financing a home," "saving & investing" or "money."'s corrections policy -- Posted: July 28, 2006
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