If you have changed jobs several times during the course of your career, you probably have an interesting collection of retirement savings accounts from your previous employers. In fact, according to the Department of Labor, Americans move to a new employer once every four years and our collective trail of old 401(k) and 403(b) plans totals in the trillions of dollars.

While leaving your retirement account with a former employer is a better decision than cashing out your account and splurging on a boat, it may be more beneficial to consolidate your retirement savings by rolling your old 401(k) or similar employer sponsored retirement plan into an IRA.

A Rollover IRA offers you four major benefits:

• Increased Investment Options. The biggest advantage of rolling over your 401(k) into an IRA is the wider universe of investment choices, a benefit that’s more valuable to you if the choices in your old 401(k) plan are limited or performing poorly. Most employer-sponsored retirement savings plans offer a choice of several mutual funds and/or company stock. However, with an IRA you can invest in mutual funds, stocks, bonds, and even non-traditional retirement investing options such as real estate and venture capital.

What’s more, if you keep your rollover IRA separate from other IRAs you may own, and if you qualify to open a Roth IRA, you can decide to convert the traditional rollover IRA to a Roth IRA where future earnings on the account are income tax free. Note that whether you qualify for the Roth IRA conversion depends upon your annual modified adjusted gross income.

• Easier Record Keeping and Account Maintenance. There’s no question receiving 401(k) statements from various employers makes it difficult to monitor what you own and ensure each investment is playing the role you intended in your portfolio. It’s also more challenging to guard against harmful portfolio overlap where, for example, two funds from different investment companies could own many of the same securities. By consolidating your retirement accounts into a Rollover IRA, you facilitate the process of reviewing and rebalancing your portfolio. And, of course, you gain this greater convenience and control without tax consequences or other penalties.

• Greater access. If, for example, your previous employer changes 401(k) providers, your plan assets will be temporarily unavailable to you due to a "blackout" period that occurs as funds are transferred from one plan provider to the other. That time frame can stretch from a few days to a few months. In addition, you can tap your IRA penalty-free before age 59 ½ for the purchase of a first home or college expenses.

• Flexible Estate Planning. IRAs also offer more freedom, as well as the potential for tax savings, in the estate planning department. If you want to name multiple beneficiaries or a charitable organization as your beneficiary, that is best done with an IRA. Many employer-sponsored plans do not accommodate sophisticated beneficiary designations.

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