The Planner's Perspective: Declutter Your Financial Household
By Paul Morrone, CFP ®, CPA, MSA
In the golden age of banking, banks used to entice new customers with items such as a new toaster, a set of knives or maybe even a camera for opening up a new checking account.
However, once the toaster broke, the knives wore out and the camera was thrown away with your old VCR, you likely held on to that checking account for no reason other than the fact it was already there. In the same way, we acquire ‘stuff’ that accumulates in the corners of our closets and gets tucked away in the basement, we accumulate financial ‘stuff’ that often gets unaddressed simply out of the inconvenience of having to do something with it.
If you were nodding in agreement with me as you read that first paragraph, it’s clear that you know exactly what I’m talking about. It’s a pain to switch banks, close an account, move assets or review an outdated will, but the costs and risks of not doing these things should be of much greater concern. Shedding some financial baggage can be an emotional relief (because you know you need to do it!) and can help provide clarity and efficiency in your everyday life moving forward. Not to mention you may feel like you have a better handle on everything after a good once-over. Below is a common list of items that we see on a regular basis that often go overlooked year after year:
- Duplicate bank accounts at multiple financial institutions
- Old or outdated life insurance policies
- Stock held at by transfer agent (i.e. Computershare)
- Stock or bond certificates
- Mutual funds purchased by a broker
- Inherited accounts
- Qualified retirement plans from past employers
- Credit cards (especially store-specific cards) that are no longer in use
- Outdated trust instruments
Over the next few weeks, start to take an inventory of all your assets, liabilities, insurance policies and legal documents. If you can’t easily locate everything, that should be a sign that it is time to take action.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual