While the set-it-and-forget-it retirement strategy is attractive to many, financial expert Suze Orman warns that you could be sitting on a financial disaster down the road without some simple financial housekeeping.
Like other housekeeping tasks, financial housekeeping is rarely as bad as it seems – and you’ll feel great when it’s done. Here are the steps that can help save you $100,000 or more and make sure your money is working for you and not against you:
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Rebalance retirement accounts
At least once a year, check your retirement accounts and ensure they’re balanced in an appropriate ratio of stocks, bonds, and cash for your long-term goals. If you don’t know how to balance a portfolio, check out Benzinga’s investing resources.
Depending on how close you are to retirement, you might want to capitalize on stocks’ strong performance over the past years or dial back growth and rebalance to a higher percentage of bonds and cash reserves.
Remember that you can move money inside retirement accounts by selling shares of one stock, bond, or fund and buying shares of another without a capital-gains tax bill.
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Check Retirement Account Beneficiaries
While in your retirement accounts, check who you named as the beneficiary. This is more important than most people realize. Your stated account beneficiary on file with the administrator will get the money in the account, even if your will names a different beneficiary. This one cannot only be embarrassing; it can be disastrous for your loved ones.
How awful would it be for your estranged ex or someone you haven’t spoken to in 20 years to get your hard-earned money? If you can’t remember who you named as a beneficiary, check and update it if necessary.
Updating the account beneficiary becomes even more essential if you’ve gotten divorced, had children, or been through any other life changes. And if you have a life insurance policy or any annuities, you will want to ensure those beneficiary forms are up to date.
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Double-check subscriptions
Companies of all sizes depend on you forgetting about those monthly or annual subscriptions you signed up for and then forgetting to cancel. While you might not use them, you’re still paying for them.
According to C&R Research, the average American spends $219 monthly on subscription services. That’s $2,628 a year, or over $26,000 in 10 years, which could be saved, invested, or used for other goals. Take inventory of all subscriptions and cancel any you don’t use. Then pause any you use infrequently to see if you even miss them – potentially saving yourself $100 a month or more.
The biggest personal finance take-away? Small actions add up to long-term gains or losses. Cut back on subscriptions you don’t need, check on your investment portfolio, and keep named beneficiaries up to date to save more and protect your future wealth.
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This article Suze Orman’s $100,000 Wake-Up Call: Why Your ‘Responsible’ Financial Plan Is a Ticking Time Bomb originally appeared on Benzinga.com
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