Simplify, Simplify, Simplify (008)
As I continue to live in a busy and noisy world, I am learning to value things that simplify my life.
For example, reading pages and pages of instructions about a new product I purchased and trying to figure out how it works…is not that fun anymore. OK…it has never been that fun!
Over the years, I’ve noticed that clients often confuse diversification with complexity. Typically, we accrue multiple retirement accounts from different phases of our lives. And…if not careful, we may feel that keeping these accounts separate is part of a diversification strategy.
Here are four reasons to consider consolidation.
Easier to Manage
As you consider retirement, you will need to structure your investments to provide the income you will need. This can be more difficult to do when you have multiple accounts. However, combining those accounts can help you select investments that meet your short-term and long-term needs.
2. RMD’s
Once you reach a certain age, the IRS requires you to take required minimum distributions out of your retirement accounts each year (RMD). Each financial firm will notify you of your RMD requirement if you have multiple accounts. But, as you get older, that can become a hassle and easy to overlook, and…the IRS makes you pay a steep penalty!
3. More Free Time
Who doesn’t want more free time? Combining accounts can help. There will be less mail to open, fewer emails to read, fewer passwords to manage, and fewer papers to file.
4. Easier for Beneficiaries
Checking beneficiaries is typically not on the top of everyone’s list. As life changes, reviewing your beneficiaries is good to ensure your assets will eventually funnel to the appropriate people. It’s easy to overlook a forgotten or obscure account. After you die, it will be much easier for your family to deal with a consolidated account rather than having to track down multiple accounts in numerous places.
So, if you have left a trail of retirement plans in your wake throughout your career and are tired of the complexity, click this link, and let’s talk about how we might consolidate… and simplify… those plans for you.