By Arie J. Korving

According to a recent survey, the average household is juggling no fewer than eight different retirement savings accounts. Many investors are looking to simplify their lives by consolidating at least some of those accounts. And nearly three-quarters of them consult with a financial adviser rather than seeking information from their employer, a fund provider or another source.

So what should you do if you have two, three or more retirement accounts? You have to keep in mind the rules about rolling or transferring retirement accounts to avoid paying taxes. Making the wrong decision can result in significant losses, taxes and penalties.

First, find a financial adviser you can trust, preferably an independent RIA — one who can give you unbiased advice and guide you to your goal. He should be able to create a retirement portfolio that’s designed just for you and will result in growth to meet your goals with the least amount of risk.

Second, make sure that assets from the various retirement accounts are transferred from custodian to custodian without passing through your hands to avoid taxes or penalties. A “direct rollover” is defined as receiving money from one custodian and putting it into another IRA within 60 days. Beginning Jan. 1, 2015, you can only make one of these rollovers per year. However, according to the IRS, this limitation does not apply to:

• Rollovers from traditional IRAs to Roth IRAs (conversions)
• Trustee-to-trustee transfers to another IRA
• IRA-to-plan rollovers
• Plan-to-IRA rollovers
• Plan-to-plan rollovers

Third, you have to be especially careful when taking a distribution from a retirement plan like a 401k when you retire or leave your employer. The IRS requires employers to withhold 20% if a check is sent to you even if you intend to roll it over later. If you later roll the distribution over within 60 days, you must use other funds to make up for the amount withheld. Withholding does not apply if you roll over the amount directly to another retirement plan or to an IRA.

Fourth, make sure that fees are reasonable so that you, rather than the adviser, get most of the gains. The fees that you pay include the fees paid to an adviser plus any fees paid to the mutual funds or other investments you make.

Fifth, be sure that your adviser provides you with a performance review at least once a year so that you know how you are doing. Most brokerage statements do not provide the level of analysis that is needed to give people a good picture of the performance of their portfolio. A good financial adviser has the tools to provide analysis and context to track performance within the context of meeting investment goals.

Sixth, remember that once you reach 70 1/2, you have to begin taking money out of your “regular” retirement account. If you have a Roth retirement account you can delay until you need the income.

Arie Korving is a life-long financial adviser and the founding principal of Korving & Company. For more information, visit www.korvingco.com or call 638-5494.