Retirement should be a time for relaxation and enjoyment, but keeping track of your retirement finances can be a lot of work. To make it easier, take a few steps to simplify things.
First, consolidate your retirement accounts. It is not uncommon for retired individuals to have several accounts, such as different types of Individual Retirement Accounts (IRAs), profit-sharing plans and 401(k)s. If multiple accounts have the same tax-deferred status, then they can be combined into one big IRA.
Consolidating all of your retirement accounts into one IRA makes everything easier to keep track of, from monitoring your returns to making sure you are taking your required distributions. You can also more easily compare rates at different financial institutions. Changing banks is simpler with one account, as is changing your contact information.
There can be some complications, especially regarding inherited IRAs and Roth IRAs, so consult your estate planning attorney when necessary.
When it comes to credit cards, the same advice applies: simpler is easier. Many people have more credit cards than they need, including cards that were applied for as part of a promotion. Multiple cards means more accounts to keep track of and more payments to make, increasing the chance of error. Canceling old cards with low balances does not adversely affect your credit score, so try reducing to just two or three credit cards.
Finally, do not forget to stay vigilant about security measures. Nothing can complicate your life like having to deal with fraud or identity theft. For online banking, use strong passwords that you change on a regular basis, and check accounts and your credit report regularly for fraudulent activity.
With your financial life simplified, you can spend your time in retirement as you were meant to: enjoying yourself.
For more information about our estate planning services, visit www.littmankrooks.com or www.elderlawnewyork.com.
