Making money grow in tough times

By George Chamberlin - For the North County Times | Sunday, June 15, 2008 12:26 AM PDT ∞

It seems that these days it is increasingly difficult to do anything with your money that results in positive returns. The stock market has turned into a crapshoot, interest rates on deposits are paltry, and real estate is real estate.

So, in these challenging times financial consumers have to look for other ways to make their money grow. And, high on the list of "smart

money moves" is making sure you cut the costs and expenses of managing your money.

One of the easiest ways to do that is to consolidate your various retirement accounts and eliminate the annual custodial fees and hidden costs that can eat deeply into your total return.

The way that people change jobs these days, it is not unusual to find situations where a worker might have modest amounts of money in several 401(k) or other employer-sponsored retirement plans. Each of those accounts carries fees that are duplicated and could be eliminated if the balances were rolled into one account, probably the one offered by your current employer.

And, think about the many different individual retirement accounts you may have opened over the years. People often wait until April 15 to file

the tax returns and it dawns on them that they need to make an IRA contribution. So, they stop at the first bank or brokerage firm they see and

open a new IRA for their tax-deductible contribution.

All of a sudden, you wind up with ten IRAs, each charging as much as $100 a year in custodial fees. Depending on how you have the money

invested, you may not be earning enough interest or seen the growth on your investments provide enough to cover those costs.

Just think, consolidate those ten accounts into one and you may be saving $900 a year. That's money that stays in your IRA and grows for your retirement.

A reader recently asked me about what happens if you consolidate these accounts into one deposit at a bank and the balance exceeds the Federal Deposit Insurance Corporation's protection.

Turns out the person was not aware that in 2006 the FDIC raised the insurance coverage on most retirement accounts from $100,000 to $250,000. That was more than enough to cover the balance in her combined accounts. This, of course, applies only to traditional deposit accounts and not investments like mutual funds and annuities.

It does cover traditional and Roth IRAs, Keogh accounts, and certain employer-sponsored plans that are self-directed.

Keeping fees and other expenses under control is one of the smartest things you can do right now to make your money grow.

George Chamberlin is a regular contributor to the North County Times and also is a TV and radio commentator. Contact him at georgeccsd@yahoo.com.

First name only. Comments including last names, contact addresses, e-mail addresses or phone numbers will be deleted. Attempts to misrepresent your identity or impersonate any person will not be approved. All comments are screened before they appear online, so please keep them brief. Comments reflect the views of those commenting and not necessarily those of the North County Times or its staff writers. Click here to view additional comment policies.