For example, someone may open a Fidelity IRA one year and a Merrill Lynch the next, just to invest in a mutual fund available through that particular family of funds.It is also very common for an individual to allow his or her retirement funds to remain in the employer plan, such as a 401(k), 403(b), or the pension plan, after he or she leaves the company.Each separate IRA will send you Internal Revenue Service Form 1099-R at the beginning of the new year reporting last year’s distributions.You must report these numbers in your tax return, along with contributed amounts. It also might be easier to keep track of your investments if combined into a single IRA.Now that you have inventoried and evaluated your portfolio, you may wonder whether you really need to keep all your accounts separate.
Eric could simplify his record keeping by combining some of his accounts.
Having money in multiple accounts with different funds does not necessarily make your portfolio more diversified.
In fact, it may make it harder to see your holdings, and may actually conceal very similar investments in various accounts.
When you have multiple accounts, it can be more difficult to understand how much money you have and where it is.
Over time, you may even lose track of some older accounts.