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What steps have you taken to simplify your finances?

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AUTHOR: Jonathan Clements on 6/05/2024
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Nick Politakis
3 months ago

I have consolidated everything into Schwab. No more vanguard, cd’s with a bunch of online banks. I’m a bit hesitant about having all my eggs in one basket but …..

H S
3 months ago

My wife and I closed out 2 small inherited IRA’s. We had several mutual funds in the name of diversity in our non retirement account. Over the last several years we have sold all except our muni fund. All the proceeds from the sales went into the muni. Our IRA’s now have only one fund each.

Nuke Ken
3 months ago

Here are my two biggest:
1) I took my pension as an annuity rather than a lump sum.
2) I left my 401(k) with my former employer.

I will have an ongoing relationship with my old company for the rest of my life as it is the custodian for the bulk of my wealth. I’m sure some would bristle at that, but I have no issue.

Jeff Bond
3 months ago
Reply to  Nuke Ken

Ken – as long as your former employer isn’t hitting you with large fees and the fund selection is reasonable, there’s not a compelling reason to change. My former employer started charging a quarterly fee while I was still working, and often changed available funds, so I rolled my 401(k) into a Schwab IRA. Once you are old enough you may want to transfer to an IRA so you can use QCDs for charitable contributions.

R Quinn
3 months ago
Reply to  Jeff Bond

I implemented my company 401k back in 1982 and I had an emotional attachment. Over the years I negotiated with the unions for a higher company match in exchange for all plan expenses being paid by the trust.

After I retired they implemented a new charge on inactive accounts. That meant those retired were paying for expenses of the plan twice. I had enough and transferred to Fidelity just on principle.

Nuke Ken
3 months ago
Reply to  Jeff Bond

Jeff, you make good points. I retired from a large, stable company with very reasonable 401(k) fees and great fund options. I do want to eventually use QCDs so may need to do the IRA rollover someday. Still, that’s over a decade in the future and who knows what the tax laws will be then.

OldITGuy
3 months ago
Reply to  Nuke Ken

There’s some good reasons to do an IRA rollover, but be aware that you probably forfeit the ERISA protections for whatever protections are afforded IRA’s in your state. For example, in my state an IRA is only protected from legal judgements up to $1,000,000 dollars, while an ERISA protected (ie. qualified) 401K has unlimited protection from legal judgements. Just something to be aware of.

David Lancaster
3 months ago

I have too many accounts so I’m in the middle of consolidating:

Inherited money from my parents at multiple companies (strangely enough not at my preferred company which is Vanguard) with both Roth and traditional accounts. Original plan was to continue taking RMDs on their schedule as a homage to them. Recently decided to use solely these funds to pay our obligations (we are retired and delaying SS) in order to decrease the numbers of institutions.

In our accounts converting all of my wife’s traditional IRA to a Roth as her’s is the smaller balance and she has had two members of previous generations who lived to be at least 102 1/2 (her mother is still going).

Finally converting all my equity position into total US stock, or world stock ETFs. Bonds will be approximately evenly split between short term, short term TIPS, and intermediate ETFs.

Last edited 3 months ago by David Lancaster
Michael1
3 months ago

Having no fixed abode. Said somewhat in jest, but it actually does remove a lot of complexities. 

More seriously, not enough. Almost all long term assets (and net worth) are at one brokerage. Yet I’ve actually considered moving some of it to a new account as cybersecurity/fraud protection. Also, it includes several positions we could eliminate but at the cost of incurring capital gains.

eludom
3 months ago
Reply to  Michael1

I’m leaning towards keeping my current split of retirement funds at vanguard and taxable @ etrade. Largely to diversify risk.

I spent 20 years in cybersecurity, and things are not getting better. Eventually Bad Things Will Happen :-/

OldITGuy
3 months ago
Reply to  eludom

I agree. If something bad happens, even if you don’t lose money you may not be able to access your money for a while. Depending on the timing, that could be very bad. So while I like the idea of consolidating everything in one place, I really can’t bring myself to do it.

Edmund Marsh
3 months ago

One of the first financial simplification steps my wife and I took was paying off our debt. We did this years ago, and weren’t thinking about it in those terms at the time. We thought of it as a risk reduction. And it felt good to do it.

I know now that simplification and reducing risk go hand in hand. Fewer moving parts mean there’s less chance of a slip up as I age. Again, it feels good to get leaner.

Therefore, as we are able. we are reducing the number of financial accounts we manage for ourselves and others, and reducing the number of investments within those accounts. The goal is to have the bare minimum of logins to see all our money.

Another goal is to match our core expenses with steady income. We’re still working, but as we shift out of that complication, we’ll move toward Social Security at age 70 and income annuities to fill in the gap.

Other simplifications concern meeting the needs of daily living as we age, but we haven’t yet sorted those out.

OldITGuy
4 months ago

Turned on the text and alerts on my credit card and banking accounts. Since I get an alert on every transaction pretty quickly after it happens, it really makes reviewing the monthly statements a breeze since I’ve already reviewed every transaction right after it occurred. Since I also use the text/email alerts as my “receipt”, I feel comfortable declining the printed receipt for many small purchases, like the gas pump receipt at Costco.

JAY SCATTERGOOD
4 months ago

I’m 78 with 4 Cancers from Agent Orange and lucky enough on 1 hand to be 100%P&T VA disability plus both wife and I are on Social Security,,,,the wife works part time to save or marriage (haha)……we have 2 brick and mortar banks and 2 Vanguard accounts 1 major Credit Card which we payoff monthly that is as simple as I like it ……constant stream of income an 8% average return on investments……..life is as good as it can get and enjoy each day without too many regrets

Matt Morse
4 months ago

I reduced the number of accounts to the bare minimum: Roth, traditional, HSA, 401k, taxable, checking. All accounts hold a single fund, so bare minimum number of holdings. All accounts are with Fidelity, including my only credit card, so I can manage all my finances from a single web site.

johntlim
4 months ago

Reduced my number of holdings and reduced my number of financial accounts.

Roberto Sarmento
4 months ago

I’m very nerdy with my finances and I’ve been using Quicken for over 30 years. I have all my bank, brokerage, mortgage and credit card downloaded every other day. Very easy!

Klaatu
4 months ago

Custodian consolidation.

Rick Connor
5 months ago

We simplified by having one brick and mortar bank, one online bank with rewards CC, one Investment company (Vanguard) and 1 Amazon Prime CC. We then bought a 2nd house and complicated matters again. We are back to simplifying again!

smr1082
5 months ago

I have simplified my finances since retirement a year ago, but need to do more. We have several financial accounts and each offers some advantage. Investments are all in funds with low fees or ETFs. Stopped trading in individual stocks. I opted for pension instead of lump sum to provide a comfortable income stream. All my insurance is with one company and all bill payments are on auto pay.

Mark Eckman
5 months ago
  • 1 credit union for all banking
  • 1 credit card, paid off monthly
  • 1 brokerage firm for all investments
  • 1 IRA that also consolidates all 401k’s
  • 1 Roth that consolidates all Roth 401k’s
  • Anything that is a recurring regular expense goes on autopay
  • Use the free budget tracking tools at the credit union
Jeff Bond
5 months ago

There are some simplifying steps we took well before we retired. My wife and I keep our finances separate, as we are both in our second marriages. We fund a joint household account at our credit union where all regular bills are on automatic draft. This simplifies the payment process and allows us to review what is paid and make sure nothing goes awry. We maintain our individual checking accounts at the same credit union, which simplifies the transfer of funds from one account to another. One thing I did was to consolidate all investment accounts to one place. When I retired, I had a regular investment account with one financial house, an IRA with another, and a 401(k) with a third. After I retired, I consolidated the IRA and 401(k) into a single IRA with the same financial house as my investment account. Now I can review my investment and retirement accounts at a single website.  

Jeff
5 months ago

As others have mentioned, we consolidated accounts to limit the number of financial institutions we deal with. This has a side benefit of making it easier to keep asset allocations aligned. Overall, we also simplified by reducing risk.

Sanjib Saha
5 months ago

The few major changes I made in my investments are:

  • Consolidating to a single brokerage account. My HSA and 401K are also with the same institution.
  • Switch to brokerage CDs and individual Treasury/TIPS instead of multiple CDs with different banks.
  • Not renewing any individual corporate bond as they mature. Not investing in preferred stocks when existing ones are called away.
  • Reduce over-diversification and switch to total market funds.

I also simplified my bank accounts and credit cards – closed accounts that I don’t normally use. Almost all bill payments are now auto-paid. I also make lumpsum advance payments for utilities and federal taxes. This isn’t a smart financial move given that short-term interest rates have gone up and I’m losing potential interest, but the advance payments reduce the pain of making frequent payments round the year.

Ken Begley
5 months ago

I have quit trying to buy individual stocks. I have moved or are moving most of my money into “life cycle” funds that will automatically rebalance as my spouse and I age. Plus my spouse has no interest in investing so I have told her to just leave things as they are after I am gone and she should be okay

steve abramowitz
5 months ago

I have found simplifying my financial papers and instructions for my family to be more challenging than I had anticipated. The problem is “simple.” The notebook of documents and instructions has been prepared but after two years neither my wife nor son has opened it. Alberta is preparing to assume the responsibility of real estate ownership, but Ryan is yet to step up and be ready to manage the family’s liquid assets.

I have needed to remember that family members must be allowed to pass through the denial phase of anticipatory grieving in their own way and at their own speed. Though 79 and the family member who has long managed the family’s finances, I’ve had to learn that my purpose is to help them and not to satisfy my own need to go out in a flair and rush to closure. I need to have faith that the family’s financial pow-wow will come when all three of us are ready.

R Quinn
5 months ago

I consolidated everything at Fidelity. Log in and i get a complete picture of all our investments and net worth. Transactions are simple.

Andrew Forsythe
5 months ago

Not enough, I’m afraid. This is one big financial goal that continues to elude me.

One impediment is, I guess, a good problem to have: a number of long term investments that I’d like to be rid of but they have substantial imbedded long term capital gains, so selling would produce a big tax bill (not to mention IRMAA surcharges). If I simply hold onto them, there will be a stepped up basis at my death.

I’ve also maintained accounts at both Schwab and Vanguard, because each has some unique benefits and also because I have an ingrained disinclination to keep all my eggs in one basket.

I do use an aggregator where I can see everything, and everything is analyzed, on one screen, and that does help a lot to understand my overall picture.

Mike Zaccardi
5 months ago

I have consolidated my investment accounts extensively over the past two years. I’ve profiled my journey on Humble Dollar. For some reason, there’s a high amount of peace of mind seeing all my financial assets in one place–even my checking account (which earns 5.3% APY right now).

The latest move now in the books was selling shares of an old employer’s stock and taking a full distribution from an Employee Stock Ownership Plan. I received the check, and then immediately deposited it into my Solo 401(k). That way, not only is the money invested in my primary retirement account, but I avoid taking taxable dividends each year.

Unfortunately, I still have some money in Series I savings bonds (which I plan to sell on August 1 this year) and other cash tied up in ‘fine art’ and ‘fine wine’ through two once-popular alternative investment companies.

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