Simplifying Retirement With These 8 Money Tips

Simplify Retirement With These 8 Money Tips

Workers nearing retirement tend to assume their life will slow down once they leave the workforce. But many retirees find the opposite is true.

As you develop a retirement routine and your calendar fills up, you’ll want to spend less time on mundane tasks, such as managing your money, to make room for leisure. Simplifying retirement finances is one way to reduce your monthly workload and lower your stress at a time when your priorities should be focused on relationships and activities. Here are eight money tips to help simplify your retirement so you can spend your time doing what matters.

Select primary accounts

If you’ve accumulated multiple bank and investment accounts during your working years, you can simplify your financial life by choosing one institution and moving all your assets there. If possible, limit your finances to one checking and one savings account, a single credit card and one primary brokerage account or manager for your investments.

Liquidate your other accounts and move the cash to your primaries. Pay off and cancel any retail credit cards, and only keep one rewards card, ideally the one you’ve owned the longest. Then roll over any investment accounts to a single online broker or money manager, particularly any 401(k)s from previous employers. Consolidating your money means fewer logins, statements and balances to keep track of.

Pay off all debts

Many people nearing retirement have spent a good portion of their lives in debt of one kind or another. Being debt-free by the time you stop working is a noble goal that will simplify your finances and increase your ability to outlive your savings. Start by targeting any consumer debt you have, such as loans on vehicles. Then calculate how many years are left on your mortgage, and adjust your monthly payments to accelerate progress. Having zero debts reduces the number of transactions from your bank account and eases monthly cash flow obligations. A debt-free retirement ensures peace of mind that a banker will never come after you or your estate.

Consolidate investment funds

Over a period of decades, investment accounts can become over-allocated to too many different stocks and investment funds. The holdings in these funds often overlap each other and don’t further diversify your portfolio. Retirement is a good time to consolidate funds to simplify your investments. Proper diversification can be accomplished with fewer funds and lower fees.

You can decrease the number of funds you own without sacrificing returns or diversification by allocating your portfolio to broadly represented stock and bond index funds. These funds are made up of thousands of holdings and are managed passively by tracking an index instead of having managers select the funds. A byproduct of switching to passively managed funds is the fees are usually much lower than actively managed funds. Fewer funds in your portfolio require less of your attention.

Eliminate paper

Most financial institutions now allow you to manage your money digitally. Though printed paper statements and mailings are still the default, it’s much easier to receive your documents via email. Electronic records are also stored on your financial institution’s website, and you have the option to download them to your computer.

By eliminating paper records and going electronic, you avoid the mail and clutter that can accumulate in your office or mail area. Banks like it too because it lowers their costs, and they may offer incentives such as lower fees to go paperless. Not having to organize or shred paper will allow you to spend your retirement on the things you enjoy doing rather than menial and unnecessary tasks.

Downsize or move to a newer home

Downsizing to a smaller home is a smart move for many retirees. Over the years, a larger home accumulates so much stuff it can be overwhelming. Moving to a smaller home will require that you sort through your possessions and eliminate what you don’t need before you’re physically unable to. A small home in your area will also cost less to own and maintain. That means more money to cover living expenses and better financial security. Newer homes have the added advantage of reliability, more comfortable fixtures and less maintenance.


Instead of owning your residence, renting a home can help bring tremendous simplicity to your life. You’ll no longer need to worry about do-it-yourself home projects or find a plumber when there’s a leak. Just call the landlord or property manager and it’s fixed. And if a major repair is needed, money won’t have to come out of your pocket to fix it. Try to find a community that caters to seniors. A senior community will understand your needs better and may offer additional amenities such as a communal room, ride sharing, activities and outings.

Cut subscriptions and recurring expenses

Automatic electronic bank deductions are convenient for subscription-based services, but make sure to turn off payments for any services you no longer use. It’s a good habit to look closely at your monthly cash flow to see exactly where your money is spent. Decide what recurring expenses are necessary, such as utilities, but then reduce your monthly outflow by cutting whatever is unnecessary. You may be able to cut magazine subscriptions, gym memberships or online services you don’t fully utilize anymore. In a few months, you’ll have more money in your pocket and fewer transactions to account for.

Consider an annuity

Annuities are financial products that provide fixed income to retirees. These products come in many variations, but the basic premise is that you pay a lump sum and in return receive a fixed income payment over the period of the annuity. If your investments are scattered and you’re unsure about a withdrawal strategy for stable income, or if you’re looking to simplify your retirement income streams, an annuity may be right for you. However, annuities can be difficult to understand, and the bad ones are infected with excessive fees that never go away. So do your research and get trustworthy advice if you need help. Make sure you fully understand the implications of the product before making the purchase.

Source: U.S. & World Report News
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