Years ago I was introduced to the concept of KISS (Keep It Simple Stupid).
The notion, which I still endorse, means stay on point, stay focused, get to an actionable decision, make it and move on.
Over the past fifty years of participating in the investment business this notion has served me well. Now that I near retirement, this old rule of business has taken on further meaning.
I received a call from a client, a friend of many years, concerned about his numerous accounts (held outside of our firm) teetering on the brink of being taken over by the state because the accounts were inactive.
Each state has its own rules for financial institutions regarding turning over accounts to the state treasury that have been inactive for a period of time. My friend, like many others, has accumulated a number of investment accounts, including investments held at various companies directly (not through a brokerage account).
This makes the work of collecting all the relevant tax documents more difficult, especially as you get more forgetful as a senior citizen. Did I get all my 1099s? Where did I put them? Am I ready to sit down with my tax professional to get my 2014 tax return completed?
In life, things get lost – computers drop addresses, the post office returns mail even though it has a valid address, and people move and forget to have mail forwarded or notify all of their investment accounts about their new address. Things just occasionally fall off the radar and investors can lose track of accounts when they stop receiving notifications.
Furthermore, mergers, acquisitions and bankruptcies complicate matters as investors may be asked to make decisions about issues for which they have little or no relevant information. Often such notifications are ignored because investors are indecisive. A lifetime of financial transactions through many institutions and firms can yield a closet full of paperwork that will ultimately require your estate executor to spend days of sorting and sifting to decipher what is important and what is no longer useful.
So as an investor gets into the retirement years, it is time to employ KISS again to make life easier and less stressful.
I recommend that you take all of your various investment accounts, select one investment firm and consolidate these holdings in one place.
It is as easy as taking all of your current statements to your chosen investment firm and allowing the staff there to corral your various investments so that all your holdings can be displayed on one statement from one firm.
Furthermore, at tax time you will need to look for only one 1099 related to your investments to give to your tax preparer.
As your attention in life drifts from the material world to concerns about your health, your spouse’s health, travel opportunities, grandchildren and great grandchildren and the spiritual domains of life, you can make sure the money side is simple and direct and all in one place.
Consolidation will make your investments easier to manage and it will make the eventual settlement of your estate easier by sparing your executor and heirs from having to search for family assets. In retirement your responsibility is to make your life simpler and dispose of the baggage you accumulated during your working career.
My investments are already consolidated at one firm. So now I get to handle other pressing business, like cleaning out the garage so my wife has a place to park her car this spring!
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