Things To Do While You’re Still Sentient

And that’s how it goes, you live long enough and people get old.

Lori McKenna

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

  1. are not so young anymore, but…
  2. your mental faculties are fully intact

If this is you, now would be a good time to review my checklist of things to do while you’re still sentient. Consider:

1. Simplify your investment strategy.

Forget about investing with complicated asset allocation re-balancing, owning lots of different funds, and other tinkering; instead, keep it simple and on auto-pilot.

The easiest and most cost-efficient 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 simple 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. You can read more about investing in my Ten Commandments.

 2. Simplify your financial accounts.

Similarly, slim down the number of financial accounts you have. Roll over any old 401Ks into an IRA and merge multiple IRAs into a single one. 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 another account 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.

You also have 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. You may also want to enable an automatic transfer from your investment account to your checking account.

Lastly, if you have multiple credit cards, slim down to the minimum necessary.

3. Automate the 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.

4. Be careful 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 or TouchID) when you’re in public; if you must tap in your phone’s passcode, do it carefully so no one could possibly see or video you. Treat this passcode as more precious than your ATM code.
  5. If you use Venmo or other payment apps, set a daily or weekly limit that is comfortable for your financial circumstances.
  6. Be suspicious of all links from emails and text messages. Don’t click on them unless you’re certain they’re legitimate.

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

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, a full list of all 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 limited access to each other’s individual accounts such as IRAs.

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.

 6. Designate a trusted contact.

For your investment accounts, designate 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.

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.

 7. If you engage a financial advisor, determine whether 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.

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

Now is a good time to update them if there have been relevant life changes.

9. 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 daily food ration, 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.

If you wait to do these things until it’s too late… well, it’s too late and it will be messy and costly for your loved ones to untangle these issues.

Make any necessary changes. While this is no one’s idea of fun, 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.

Questions?  Get in touch

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