Financial Spring Cleaning

The calendar says it’s spring, yet the weather says differently. While there is inclement weather, consider a financial ‘spring cleaning’.

  • Are you on track for retirement?
  • Is your estate plan in order? Does it need an update?
  • Evaluate your spending.

You might consider the following 6 steps for a financial spring cleaning:

1. Create a roadmap to your financial information.

Could someone step into your shoes if you are incapacitated from an illness? Do you have a power of attorney in place? Could someone act on your behalf? Do you have information on all your bank accounts, investment accounts, retirement accounts in one place? Does it include account numbers and access information?

Where are records kept? Like title to your car, deed to your house, copy of Power of Attorney (POA) or will.

2. Consolidate your accounts

Do you have 401(k)s held at prior employers? Consider consolidating into your current employer if possible. Or consolidate into an IRA where you have more flexibility and investment choices.

If you have ever acted as a personal representative or executor on an estate, you know a roadmap is helpful. Having fewer accounts makes the job of the POA or executor easier.

3. Review your beneficiaries

Do your beneficiaries in your will and/or trust match the beneficiaries on your life insurance, annuities and retirement accounts? The latter are contracts and govern the distributions from these accounts.

When you have life events like a divorce, death of a spouse or other beneficiary, updating beneficiary documents can be overlooked in the emotional upheaval.

4. Review your credit reports

You are entitled to one free credit report from each of the credit report agencies.

  • Equifax –
  • TransUnion –
  • Experian –

Do you recognize all the accounts listed on these reports? Are there any accounts that need ‘cleaning up’ to increase your credit score?

With Identity theft on the rise, you might consider freezing your credit. You will still need to closely review all the charges on your credit card statement to be sure they are yours. But no new credit accounts can be opened in your name.

5. Review your spending

With high inflation most are reviewing their spending, substituting lower cost items. If you are getting ready to retire, a budget is important for cash flow management. With volatile stock markets, minimizing your draw from retirement accounts is important. You encounter sequence risk of returns. (See our related blog post Timing of Your Retirement)

6. Reduce your tax refund

Break even on your taxes is the best cash flow management. That can be a little tricky. If you are getting a large refund, you may want to reduce your withholding. Now that savings accounts are paying ‘real’ interest, direct deposit monies into a savings account instead. IRS doesn’t pay interest on your refund.

These 6 steps may be more than you want to tackle during a financial spring cleaning. Pick one or two that resonates the most with you. Write an action plan – To Do List. Work on your list a little bit at a time. Hopefully you can complete the steps before ‘spring’ weather draws you outside to more pleasurable activities.


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