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How to Simplify Your Financial Life Before Retirement

Financial Planning


When I sit down with clients for the first time and look at their finances I find that many clients have way too many financial accounts.  Multiple checking and savings accounts, multiple credit cards, multiple consumer loans, and a growing number of people have monthly fees for renting "services" ( I-Tunes, Netflix, etc ).  This makes it nearly impossible to have a grasp of or keep track  of your budget and balance sheet.  A good rule of thumb might be, that if asked, you can give an answer off the top of your head what you spend each month and what is your current net worth.  See the suggestions below as a way to get started simplifying your financial life.

We spend practically all our lives preparing for our retirement, but when the time comes, the nagging concern and worry doesn’t necessarily disappear. Especially for Baby Boomers — many of which who may have already retired or are close to it — about 70 percent wish they had saved more and started saving earlier.1 In a survey by the Insured Retirement Institute, more than half of the respondents said Social Security was a must for them in order to sustain their lifestyle past their working years.1

However, all hope is not lost. The Center for Retirement Research at Boston College reports that the average retirement age has decreased thanks to a higher life expectancy, more education, less laborious jobs and more.2 So, while Baby Boomers may not feel very confident about their retirement, newer generations may have a bit of a brighter outlook when it comes to reaping the benefits of all their hard work through the years.

As you approach retirement, it’s important to take proactive steps towards simplifying your finances so you don’t spend some of the best years of your life scrambling to make ends meet. Before you turn in your two-weeks notice, consider the different ways you can make your life a bit easier before you officially start your new and exciting chapter. By planning ahead now, you can reduce the amount of stress and headaches you encounter along the way, as well as give yourself more time to enjoy your retirement instead of constantly playing catch-up.

Consolidate as Much as Possible

Through the years, many people end up with more than one banking and investment account. By picking one institution to hold all your assets, you make it a lot easier for yourself to keep track of your resources. If you can, consolidate your accounts to just one checking and savings account, which requires selecting one main credit card to carry in your wallet. Having trouble deciding which one to keep? A good rule of thumb is to choose the credit card you have had the longest since you’ll have most likely built up the most credit. 

For those who work with multiple financial professionals, consider finding one person who can manage everything for you, instead of having to work with multiple people who all specialize in one specific area, like investments. There are many financial advisors out there who will manage your money, investments and even do your taxes for you. With fewer usernames and passwords to remember and fewer statements to organize every month, these steps can help you keep everything under control as you transition to retirement.

Go Automatic and Paperless

Nowadays, most financial institutions allow you to set up automatic payments to pay off your credit card, in addition to eliminating paper statements by enrolling in paperless billing. Not only will you no longer have to worry about missing a payment every month, but instead of having to keep track of countless pieces of paper, you’ll be able to easily access all your statements within your financial institution’s account portal. You’ll still get a notification every month once your payment and statement are ready, and you can easily download your statement right to your computer if you prefer to have your own copy saved for easy access.

By not having to constantly organize and shred paper, you’ll free up more time to enjoy other things in your retirement, like spending time with your family, pursuing a new passion and working on abandoned home projects. Less clutter will naturally make you feel more organized and in control of your financial future moving forward.

Focus on What Brings the Most Value

From insurance policies to magazine subscriptions, there are numerous expenses you could be absorbing every month that don’t necessarily add much value to your everyday life. So, before you enter retirement, revisit any policies you’ve had for years and see if they are truly necessary and/or accommodate your evolving needs. You may consider replacing your current coverage plans with long-term care policies and other options that protect you from larger expenses later on down the line.

Especially when it comes to subscription services, it can be easy to lose track of what you're paying for each month. Sit down with your spouse and review the programs that may not be that necessary now that you’re about to be retired. Not only will you have fewer bills to keep track of, but you’ll be able to put aside more money for more worthwhile investments, like a new vacation house or a weekend trip to your favorite winery.

Small Steps Lead to Less Stress

A key way to simplify your financial life before retirement is to focus on the things you can control because for many of us, it’s easy to lose sight of all the excitement when there are so many aspects of our lives that seem like they’re up to chance. Retirement is a beautiful thing, and every person deserves to enjoy the fruits of their labor to the fullest extent. Before you go into full-on panic mode, take a step back, breathe and focus your attention on one item at a time so you don’t get completely overwhelmed before you even start.

The steps above are a good starting point, but there are always more ways to maximize your fulfillment past your working years. Do some research online, visit forums, chat with your friends and remember to eliminate any bad habits before they creep into your retirement years. 

1https://www.myirionline.org/docs/default-source/research/boomer-expectations-for-retirement-2016.pdf

2http://crr.bc.edu/wp-content/uploads/2015/03/IB_15-4.pdf

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.