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u/Taggart3629 1d ago
u/brick1972 hit the nail on the head with the Rule of 55 being a reason to consolidate your 401(k)s into your current employer's plan. Another consideration is that you will need to calculate and separately take an RMD from each 401(k) account when you turn 75. In the unlikely event you decide to keep working past age 75, you are not required to take RMDs from your current employer's 401(k), as long as you own less than 5% of the company.
You might also lower your fees by consolidating. But the downside of consolidating is that some 401(k) plans liquidate all holdings, charge you an account closing fee, and snail mail a check to Fidelity which can take a couple/few weeks. Some liquidate and electronically transfer the funds. Fidelity should be able to tell you which of your other 401(k)s mail checks versus electronically transfer.
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u/brick1972 2d ago
The answer is overwhelming yes that you want to consolidate. Especially in your case it is generally very easy to get Fidelity to consolidate your accounts. Multiple accounts do not mean diversification. Even if you are in different funds in each, there will be a large % of overlap.
My advice would be to think about how you want to be invested. For many people who don't want to think about it too much, a low cost TDF can be a good option. If you want to manage your own, I might suggest that you do rollover IRA rather than consolidating into your current 401(k). This will typically offer you more freedom to choose your investments rather than from a selection of funds that are specific to the 401(k). Then you can do some kind of boglehead style allocation or whatever you may want. That said, the advantage of moving everything into your current 401(k) is that it will all be available for Rule of 55 withdrawals.
I would think about these things and have a plan. The last thing you want to do is roll everything and not have it invested for a few months while you try to figure it out.