I try to simplify my IRA -- and fail miserably

Golden egg

There’s no question -- I’ve made a hash of my Individual Retirement Account.

The problem is that, since 2008, I’ve had multiple IRAs, at multiple banks, invested in IRA CDs.

I began this year with 10 such certificates at nine banks.

These can be wonderful investments when they have competitive yields. And they give retirees the peace of mind of having FDIC insurance up to $250,000 per IRA account.

But they can be trouble when they mature.

Switching from one institution to another involves paperwork not required in moving non-IRA CD money around.

The process often relies on the U.S. Postal Service and can be time-consuming.

It’s possible you’ll be unable to lock in a rate on the new CD, or that the old CD will automatically renew (at a pathetic rate) because the documents were lost or delayed.

To avoid future hassles, I decided to open a brokerage retirement account at First Republic Securities (an affiliate of First Republic Bank) and transfer my funds to it as my CDs matured.

The idea was to get back, over time, to having just one account.

And, rather than investing in CDs, I’d put that money into Treasuries and Government Sponsored Enterprise (GSE) securities.

Although the funds transfers went without hitch, my investment objectives didn’t pan out.

The difficulty was that plunging Treasury rates -- and the ever-growing spread between those rates and bank CD rates -- more than offset the simplicity I gained by consolidating accounts.

I bought two new issues of 7-year Treasury Notes and, when rates started plummeting, sold them at a small profit. But rates kept plummeting, and I couldn’t stomach reinvesting the proceeds at the lower levels.

Then, a nifty (I thought) 4 1/2-year "step-rate" Federal Home Loan Bank Bond I bought was called in after only 90 days, again because rates dropped.

The Fed’s pledge to keep rates "exceptionally low" until mid-2013, and "Operation Twist," put the final nails in the coffin of my plan.

I’ve now pulled all my money out of the First Republic retirement account and returned it to banks and credit unions.

Today, I have 16 such certificates at 11 banks and one credit union.

And I still have funds in IRA savings accounts waiting to go into additional IRA CDs.

Some simplification.

I guess I was ahead of my time.

Or maybe got ahead of myself.

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