Deciding what to do with your investment money is a high-stakes decision, especially when you’re in your 60s and just five years away from retirement. You’re going to need this money to help cover your costs since Social Security only replaces about 40% of what you were earning pre-retirement (1).
Let’s pretend, for example, that we have a 60-year-old man named Sam who has been investing money for retirement since he was in his mid-30s.
Must Read
Sam has saved up a $600,000 nest egg and has money spread around multiple different accounts, including several 401(k)s and IRAs, and a few taxable brokerage accounts as well. Since he is getting ready to retire in five years, he’s seriously thinking about moving all $600,000 to one single investment firm. However, he isn’t sure whether that’s a good idea or not.
So, should Sam move his money, or should he keep the funds in separate accounts?
The benefits of consolidating all of your money with one investment firm
There are actually some pretty big benefits for Sam if he moves all of his money to just one investment firm.
First off, if all his money is with one firm, he won’t have to worry about forgetting any accounts. While it might seem hard to believe, people do forget they have retirement accounts. In fact, approximately $2.1 trillion in assets had been left behind in around 31.9 million forgotten 401(k)s as of July 2025, according to research from Capitalize (2).
If Sam consolidates all his accounts, he will know right where the money is. It will also be easier for him to make decisions about what he’s doing with his investments if he can see everything in one spot. For example:
He can look at his total balance across all accounts to decide how much money he can safely withdraw.
He can make sure his overall asset allocation across all accounts is appropriate to his age and risk tolerance.
He will only have to deal with one company’s customer service if he has issues
He will get tax forms from just one brokerage firm instead of many.
It’s important to note, though, that putting all your money with one investment firm isn’t the same as putting all your money in one investment. He should maintain a mix of stocks, bonds, ETFs, and other investments within his account at that firm. Putting all your money into any one single investment is too risky at any age.
The downsides of consolidating all your money
Provided that Sam picks the right investment firm, there shouldn’t be many downsides to consolidating all of his money in one place.
Of course, he will want to make sure the firm’s customer service is good, and that their account management and investment screening tools work for him. Most importantly, he’ll also need to check that the firm does not charge high commissions or fees.
He also should keep an eye on the $500,000 SIPC coverage limit (3). This is kind of like FDIC insurance, but for brokerage firms. It doesn’t protect against investment losses, but it does mean you don’t lose your money if the investment firm itself fails.
However, this limit applies to each category of account, so if Sam has some of his money in taxable accounts and some in IRAs that are held by the same investment firm, it shouldn’t be an issue he has to worry about.
Read More: Non-millionaires can now hoard property like the 1% — how to start with as little as $100
Pay attention to the practicalities
Finally, Sam needs to pay attention to how he moves the money, since some of it is in tax-advantaged accounts like IRAs or 401(k)s.
He can roll these tax-advantaged accounts over, but he must follow the rules to avoid tax consequences. Specifically, traditional accounts must be rolled into traditional accounts, and Roths into Roths to avoid tax consequences, and his workplace 401(k) will have to be converted to an IRA since he’s not rolling it into another employer’s 401(k).
And, if he doesn’t do a direct transfer where his current investment firm moves the money over to his new firm, he must make sure he deposits the check his firm sends him within 60 days (4) to avoid tax penalties. A direct transfer makes the process much easier, and Sam should take that approach if he can.
There are also a few limits to know, like the fact that you can’t make more than one indirect rollover from the same IRA within one year. Since Sam is rolling over a lot of money, it may be worth talking to his plan administrator, the new investment firm, and potentially a financial advisor to make sure he does the process right.
Provided that Sam handles the rollover correctly and he researches the investment firm, the pros of moving the money over likely outweigh the cons. Sam shouldn’t be afraid to move ahead with moving the money so he has a nice, big retirement nest egg all in one place and ready to go.
You May Also Like
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Social Security Administration (1); Capitalize (2); Securities Investor Protection Corporation (3); Internal Revenue Service (4)
This article originally appeared on Moneywise.com under the title: Should 60 year old put a $600,000 retirement portfolio with a single investment firm?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
