Things To Do While You’re Still Sentient

You may have reached a point in your life where you recognize that:

1. you’re not so young anymore, but…
2. your mental faculties remain intact.

If that’s you, now would be a good time to review my checklist of things to do while you’re still sentient.

1a. Simplify your investments.

Forget about complicated investing strategies, asset allocation re-balancing, owning lots of different funds or individual stocks, being a landlord, or other tinkering. Instead, keep it simple and on auto-pilot.

The easiest way to do that is to put all of your retirement assets into a single target date fund. For your taxable assets, something similar such as a balanced fund is sensible, or a slightly more complicated three fund portfolio of an equity index fund, a bond index fund, and a money market fund. Chose a low-cost option; these funds are well-diversified already so you don’t need to fuss about that. Be mindful in setting your asset allocation and then leave it alone and find something else to fret about. And, if you spend your mornings watching CNBC, go for a walk instead.

You can read more about investing in my Ten Commandments of Investing.

 1b. Simplify your financial accounts.

Slim down the number of financial accounts you have to the bare minimum.

Roll over old 401Ks into an IRA and merge multiple IRAs into a single one. Besides a checking account, you probably only need three investment accounts — a traditional IRA, a Roth IRA (if you have one), and a taxable account. If you have an inherited IRA, that’s one more as it cannot be combined with your other IRAs. If you’re married, you need separate IRAs as they cannot be jointly owned. Keep them all at the same financial institution.

There’s no need for multiple bank accounts so just have one and link it to your investment account. If you transfer money to your checking account each month, automate that process so it just shows up on the first of the month without you doing anything.

You’re probably doing this already but if you receive Social Security, a pension, an annuity, or other regular payments, ensure any necessary tax is withheld and the funds are direct deposited into your checking account. Now focus on finding the fountain of youth or learning to play Mah Jong.

2. Reduce credit card accounts to the bare minimum.

Also, slim down the number the number of credit cards you have. Cancel all the extraneous ones (rather than just putting them in the drawer) as you want to be sure the accounts are closed. For most circumstances, 2 cards or 3 at most, is enough.

3. Automate RMDs (required minimum distributions) from your retirement accounts.

If you’re receiving RMDs from an IRA, take the full year distribution each January, withhold taxes, and electronically transfer the funds to either your taxable investment account or your bank account. Instruct your financial firm to do this automatically every year. Now, with all your free time, put on knee and elbow braces and go make a racket with the rest of the early morning oldtimers pickleball crowd.

4. Consider purchasing a lifetime annuity.

If your health is good and your life expectancy is above average, it may make sense to convert a portion of your savings to a lifetime annuity. You’ll get a check every month for the rest of your life and you’ll have fewer investments to worry about.

5. Be vigilant about your cyber-security.

1. Ensure that your email and your financial account passwords are unique. These login credentials are critical to your financial health and should be safeguarded and not reused.
2. Don’t connect to your email or financial accounts on a public wifi network such as the library, Starbucks, or the computer in the lobby of your hotel.
3. Don’t even install the mobile phone app for your investment accounts and only access them from your home computer.
4. Always use the biometric security on your phone (i.e., FaceID) when you’re in public. If you must tap in your passcode, do it carefully so no one could possibly see or video you. Treat this passcode as more precious than your grandchildren.
5. If you use Venmo or other payment apps, set a daily or weekly limit that is comfortable for your financial circumstances.
6. Don’t assume paper checks are safer than electronic payments.
7. Be suspicious of all links from emails and text messages. Never click on them unless you’re certain they’re legitimate.

6. Ensure you and your spouse both have full knowledge of the family finances.

If you haven’t found the fountain of youth, you can’t be sure which of you will be the first to depart this earth so both of you should know how the bills are paid, the full list of accounts, the login credentials, the full list of credit cards, the details of all loans, where important documents are stored, etc. You and your spouse should grant access to each other’s individual accounts such as IRAs. If you have kids or other loved ones that you trust, consider bringing them into this circle of knowledge.

Instruct your credit card company to send a text or email notification to both of you every time there is a large purchase and your investment firm to send you a notification every time there is a significant withdrawal.

7a. Designate a trusted contact.

For your investment accounts, consider using a trusted contact.

The SEC website defines a trusted contact: a person that you authorize your brokerage firm to contact in limited circumstances, such as if your broker has trouble reaching you or has a reasonable belief that your account may be exposed to possible financial exploitation.

Note that a trusted contact cannot withdraw funds from your account but can instruct your financial firm to temporarily lock down the account.

The SEC also helpfully explains why you may want one:

• If your brokerage firm cannot reach you, adding a trusted contact person to your brokerage account may help your firm ensure that your current address and contact information are correct.
• Adding a trusted contact person to your brokerage account may help your brokerage firm respond to possible financial exploitation or fraud in your account and protect your account’s assets.
• If your brokerage firm suspects that you are experiencing a health issue, adding a trusted contact person to your brokerage account may help your broker confirm your current health status.
• Adding a trusted contact person to your brokerage account may help your brokerage firm verify the identity of any legal guardian, executor, trustee or holder of a power of attorney on your account.

7b. Consider designating a limited agent.

Also consider a limited agent for your investment accounts. This person would be able to view your accounts and make certain limited transactions such as transferring money to your bank account. If set-up correctly, they should be able to assist you but not steal your money. If you trust your spouse or have some other trusted person in your life, now may be a good time to make this designation.

8. If you have a financial advisor, ensure you can trust them.

If you fully trust your advisor, then you’re in good hands; if not, you need a new strategy for how your wealth is overseen — a new advisor, a family member, or review my previous points.

Forget being nice and make a cold-hearted assessment of your advisor’s value and trustworthiness. You can read some questions you may want to ask your financial advisor here.

9. Review your will and designated beneficiaries and ensure your choices reflect your current wishes.

Now is a good time to ensure you have a will and it’s updated if there have been relevant life changes. Same goes for beneficiary designations on your retirement accounts.

10. Create a written document with the financial information your loved ones will need when you turn up dead or demented.

I have one and it’s called, appropriately, Things to know when I’m dead. List financial accounts, the location of your estate documents, outstanding debts and credit cards, insurance policies, safe deposit boxes, your dog’s preferred kibble, and anything else they’ll need to know when you’re incapable of telling them.

Share it with the future executor of your will and any other trusted friends or family. It won’t help you but it will help them.

It’s a one and done effort and then you can again forget about this stuff and go on living your sentient life. You may even enjoy writing your version of Things to know when I’m dead.

11. Don’t wait.

If you wait to do these things until you’re dead or demented… well, it’s too late. It will cost your loved ones time and money to resolve these issues. They may not remember you quite as fondly if you leave them a big mess to untangle.