How to Simplify Your Financial Life

by | Nov 9, 2020 | Retirement Planning

Retirement isn’t something that materializes overnight.  We spend a large amount of time preparing for it, but the worry and anxiety doesn’t automatically disappear. Taking an active role in an attempt to simplify your financial life is crucial to a happy retirement.

Unfortunately, a lot of retirees have financial regrets later in life.  About 70% of Baby Boomers wish they had saved more or started saving earlier in life. 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.  Getting a head start on retirement saving can lessen the reliance on Social Security in retirement.

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. 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.

There is enough going on in your life near retirement and trying to make sense of your financial assets shouldn’t be one of them.  There are ways to keep things simple, or at least make them MORE simplified than how they currently are.  When it comes to retirement planning, the KISS (Keep It Simple Stupid) method is the way to go.  Here are a few ways to make sure your retirement in financially as simple as it can be.

Consolidate as Much as Possible

Are you one of those people who has three different bank accounts, two different IRA’s, a few old 401(k)’s and some other accounts that you’re entirely sure what they are or where they came from?  Well if so, you’re not alone, but it’s time to consolidate.

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.

Finding just one financial professional to manage everything for you in one place is another way to consolidate your financial life. 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

The beauty of technology today is that you don’t have to worry if you paid your credit card bill this month.  You don’t have to worry if you paid your utility bill this month.  Automatic payments make it easier to stay up to date on any type of payment you might have.

Another great piece of technology is the ability to go paperless for pretty much every account out there.  If you have one financial professional (see above), having all of your financial statements in one place, ready to view at any time, makes it much easier to stay organized. 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

In 2020, we live in a “subscription” lifestyle.  One downside of automating payments is potentially losing sight of what you’re still paying for.  Keeping an eye on which subscriptions you actually use and enjoy is another way to consolidate expenses and simplify your life.  The same can be said for insurance policies.  As you approach retirement, some insurance policies may not be appropriate for your situation anymore.  It’s important to review your policies.  A financial planner can help make these assessments for you.

Being cognizant of what you’re paying for a monthly basis can really add up over time.  Saving a few bucks here and there can give you the ability to better allocate those dollars to things you truly care about.

Small Steps Lead to Less Stress

Simplifying your financial life isn’t just on the physical balance sheet either.  It’s also a mental battle too.  Keeping things simple also means focusing on things you can control.  There is a lot that goes on that is out of our control.  In retirement, focusing on what is within your power is one way to keep things simple.  We all deserve to enjoy a nice, simple, stress-free retirement.  Getting bogged down in things outside of our control is unnecessary worry and stress.

There are a handful of other ways to keep your financial life simple as you go into retirement.  Working with a financial planner can help you identify all the different ways to make the most of your retirement.  Having a plan will ease financial stress and make sure you’re as ready as you can be!  If you don’t have a financial planner, we’d be happy to speak with you.  Click here to schedule an initial call with our team.

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