THINKING RETIREMENT – ANDY LANDIS – Okay, truth time.  By now you’ve probably already decided which New Year’s resolutions are a no-go.

But here’s one you must keep.  This is the year—in fact, the month—you will get organized for retirement.

Here’s a simple list of what you must do:

1.   Sign up for an online my Social Security account.  Go to www.ssa.gov and register, just like at your other financial institutions.  Get a record of your earnings and check it for accuracy, and get an estimate of your future Social Security payments.  Surprise!  You always thought you could ignore Social Security, but now you find it’s vital for your retirement success.

2.  Collect all your January financial statements from your bank, your credit union, your IRAs, HSAs, and so on.  Include any outstanding loans.  Figure out your net worth as of January 1.  Now for extra credit:  do the same for the past five years.  It is growing, is it not?

3.  Now that you have all your statements out, let’s simplify the situation.  Are small 401(k)s from your last several jobs following you around like a line of baby ducklings?  You can probably roll them into a single traditional IRA.  Can you combine several IRAs into a single account at your favorite institution?  The idea is to simplify the picture so it’s understandable at a glance.  Naturally you’ll keep financial types separate (e.g. traditional IRA, Roth, HSA, etc.).  Along the way, you’ll reduce the blizzard of quarterly statements bombarding your inbox.

4.  You’ve reduced the number of accounts you have to manage.  Now make them all visible on a single page.  See if your financial institution(s) offer a service to pull all your accounts together in one statement.  Fidelity calls this “Full View.” Vanguard, Bank of America, and others offer similar services. The service makes online contact with all your accounts, even in different institutions, and blends them into a single net worth statement. You might even be able to include your frequent flyer miles.  Cool.

5.  Automate everything.  Look into auto-saving from your paycheck, auto-rebalancing, and more.  Ups and downs in the market cause emotional swings that make us investors make bad mistakes, like buying high and selling low.  Automation eliminates (or at least reduces) those emotional boo-boos.  For you unreformed traders, yes, you can keep a small amount aside to try your luck and skill against the automated accounts.

6.  Make a few projections to retirement.  Gather your Social Security estimate, your accounts, and statements from your pension(s), if any, and project forward to retirement.  You’ll find ideas on how to do so at my earlier post.

Congratulations!  This is a great start on making 2013 the year you got organized for retirement.  You know where you stand, and you’ve made it much easier to keep track and manage in the future.  One part never stops:  keep on learning and planning.




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