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I have found, especially as I get older, that there is a real benefit to simplifying many aspects of my life. For me the reasons include:
Do you find that simplification helps you and if so what things have you done to simplify your financial situation and other aspects of your life?
Below I have listed some of the areas in my life I have tried to simplify and specific things that have helped me.
Financial Investments
I have it easy as the bulk of our investments are in tax deferred (IRA) and tax free (Roth) accounts. So it has been easy for me to make simplification changes without tax consequences. I have decided that an appropriately chosen “all in one” fund is good enough for our financial needs. I specifically use Vanguard LifeStrategy Funds, and have chosen for myself to invest all of our IRA and Roth funds in the LifeStrategy Moderate Growth Fund (VSMGX).
The bulk of our investments are at Vanguard and we will likely keep them there. I also have a Fidelity account as my past employer had made use of it for certain financial accounts they set up for me. I do prefer several aspects of Fidelity’s interactive web site, so I have opened and retain Cash Management, HSA and 529 accounts there.
Automate Payments
I have all bills automatically paid using a credit card, and where not possible use ACH transfers from a cash management account.
Create On-Line Calendar Reminders and Record of Events
I have super charged the use of an electronic calendar and the search capabilities within them.
Use of Cloud Based Password Manager
If you are like me, you have accounts for hundreds of different online resources. Without a password manger it would be impossible for me to remember or manually document all of the associated information for all of these accounts.
With a password manager, I never have to remember my id or password, am able to automatically fill those fields when needed, and can store all kinds of other associated information related to the account.
In addition, certain password managers (like the one I use named BitWarden) allow you to store generated “Passkeys” that can be used on compatible websites, further eliminating the need for password and id input.
Consolidated Tracking Of Financial Resources
I find it useful to have a consolidated view of all of my financial resources. This includes:
I use a couple of sites that have overlapping capabilities, with each more useful for certain aspects:
For more heavy duty retirement planning I use a few different resources including:
Setup Privileges, Authority and Access In Advance
For online resources such as financial and medical, as appropriate, I and my spouse have both set up accounts and grant full access to one another’s accounts. Doing this in advance will prevent difficulty and delays in a situation where one loses capabilities.
What things have you done to simplify your financial situation and other aspects of your life?
I like the idea of using an electronic calendar. Is there one you would recommend for ease of use?
This is a great list. I’m learning to lean heavily into calendar reminders as well. As you said, you can even use them to find details from a previous event. For example, some friends invited us to dinner recently. We had only been to their home once, in 2019, and I wasn’t sure I knew the address. But when I went to add the dinner to my calendar, the previous time popped up, and there was the address!
I’ve also found that my Notes app has turned into an extension of my brain, especially since it saves across all of my Apple devices. Need the settings for a Peloton bike in a hotel gym? It’s there in a note. The new building entry codes for our condo, which just changed? There, too. My weekly meal plan with recipe links for when I’m in the grocery store? Yep.
Doug, I love this subject, and have written a related post or two. In my first year in the tax prep business, I had a retired client with about a dozen funky partnership K1s and a duplex that he and his wife lived in. My first thought was, how will his widow deal with all this?
About one year ago, I consolidated most of our accounts into Fidelity, including IRAs, brokerage, checking, and credit card. I also use BitWarden for passwords, and Full View to keep an eye on investments, credit cards, and net worth. I do keep an IRA and brokerage account with an advisor friend of mine, for the purpose of not having all our eggs in the same basket.
There is one area where I am a step behind you. I still own a handful of funds that require occasional re-balancing. I don’t personally have a problem with this chore, however, Chris doesn’t share my interest in such things. Also, if I survive Chris, will there come a time when I’m no longer up to the task?
I have my eye on the same Vanguard Life Strategy Funds, as well as some similar I-Shares funds. Capital Group has a managed balanced ETF, CGBL, that I like a lot. I would consider using it, along with one of the passive funds, due to low correlation. It has not been around too long, but is a near clone of the American Balanced Fund (ABALX), established in 1975. That fund has only suffered rolling three year losses in about three or four percent of all such periods since its inception. Unlike ABALX, CBGL has a .33% expense ratio and no front end load. I would argue that the expense ratio is well earned.
I have one suggestion, but it is to simplify for your children. We set up a trust. Now with our children nearing or at 40 they are named as successive trustees as of our last passing. Having all of our non retirement assets in the trust allow our children, who have always gotten along well with each other, to decide how to divvy up our assets between them, without having to go through probate. It also allows our assets at death to remain private. We decided to pay this significant expense after seeing all the hoops that my sister, my parents executor, had to jump through going through the probate process in NH.
Thank you David. Using a trust is a great suggestion. I do plan on looking into that more closely in the near future.
My parents who are now both deceased had an irrevocable trust of which I was the Trustee. That did simplify everything upon both of their deaths, so I do see the benefit.
Interestingly, just yesterday I received a presentation on “Estate Planning” from a recent Boglehead group meeting. So this idea is definitely something I am thinking of.
In the meantime, Doug, just make sure you have beneficiaries properly named on everything, including your home. This will also avoid probate.
One of the first things I have always done is set primary and secondary/contingent beneficiaries wherever possible on all accounts we open (if not already a joint account with my wife).
Short of having a trust how do you define a beneficiary on a home (ours is in both my and my wife’s name)?
It varies state to state. In Ohio it’s called a ‘transfer on death affidavit’. It’s filed with the county auditor/recorder. I used WillMaker software to prepare mine; it has the proper form for each state. There may be some states where this can’t be done.
How much time does it take to do all this? It seems like it would take an inordinate amount of time to organize and track everything.
I do auto payments and deposits. I also have a tax Excel spreadsheet that I use to estimate my current year taxes. I use this to do estimated tax payments, Roth conversion planning, QCDs, etc. I use Fidelity for all investments. I had CDs at different CUs, but have consolidated all of that as they matured. I have a limited number of low cost index funds/etfs. I do not obsess over having the perfect fortfolio, just one that is good enough.
I also have a letter of final instructions which is quite detailed with all my business, banking and investment accounts plus everything else my executor will need. I originally did that for my wife, but she passed away last year, so it is now for my kids. I have all my estate documents.
All of this has taken time to setup, but it does not require much time to manage.
I’m not sure which thing you are referring to when you say “It seems like it would take an inordinate amount of time to organize and track everything“.
My investment choice of a single “all in one” fund was a one time decision. There is nothing to manage or think about on an ongoing basis. That is the beauty of that one.
Automating payments was again a one time set up. I no longer have to do anything.
If you have to remember to do something how do you manage it? It has to somehow be managed (or I guess forgotten about). Using a digital calendar with reminders and search capabilities makes that easy. I can access it on my phone or any web browser. It is always available. If I want to remember to do something I just enter it. The beauty of entering desired details in the calendar (sometimes I add nothing, and sometimes I go as far as keeping logs of conversations) is I always have one place to look for this information and it is easily searchable. As it is a habit I just automatically use, it takes very little time and provides great functionality.
I have been using password managers for decades. It is automatic and easy and makes life simpler. Again, if you create an account it has to be managed. Why not do it in a password manager that practically automates the whole thing. Again I leverage the notes field in an entry when needed to manage details about the account that I would want to remember (think account numbers, security questions, pins, and anything else you can think of and may want to associate with the entry).
As far as tracking my financial accounts in web based applications (Empower, Fidelity, Boldin) again this was an easy one time set up as I just link my financial accounts permanently. Many people do not like doing that for security reasons, but I have few concerns about that on the platforms I use. I set Empower and Fidelity up years ago, so I have years worth of history that I can look back on as desired.
Setting up accounts and privileges for both spouses did take some time. But since at some point I would likely need to do it anyways, why not now while I have the capacity.
So yes, all of the above took some effort, and it was done over time. But in the long run, I find it a lot easier to use and manage now and going forward.
Wow. That’s quite a list. I don’t think I can add anything.
All our bills are paid automatically, and we both have access to each other’s accounts. Converting investments to cash is not automatic yet, but I agree it’s a good thing to do at some point. Have to get on that password manager too.
Though I profess to simplify, I am still tempted to add little complexities here and there, like the occasional individual stock. Also there are some things I’m not prepared to do. Shifting everything to a target date fund is one of them. I realize it can be a great solution for many, just not for me, at least right now.
We’re thinking of settling in Ireland for a while, which if we do it is going to add plenty of financial complexity.
I also haven’t implemented automatic conversion of investments to cash, but plan to do so in about a year when a recent windfall is depleted and income inflows (pension and social security) stabilize.
A life of adventure in Ireland sounds like it would be worth a little added complexity (as that sounds like the fun kind).
Thanks for a great article. We have done 2 key things:
– Moved to a small, simple house that should be easy to maintain and navigate for many years.
– Consolidated all our accounts with the help of a fee-for-service financial planner.
Both of these have been really positive changes.
It is helpful to hear your relocation went well and was a positive change.
We are also considering relocating as our daughter’s family (with two young grandchildren) now live in another beautiful state, and the move is enticing for many reasons.
I know it would probably be the best thing to do and turn out well, but we have lived in our home for 38 years, and the complexity and emotional effort of shutting everything down here and starting all over again is a real hurdle for me to get over. Change is hard for me.
My wife is more than ready to go so that makes it easier to consider.
Thanks Doug. We’re the opposite – I quite like change, but my dear wife had made it clear she would gladly never move again!