Personal Finance column: Get your financial house in order |

Personal Finance column: Get your financial house in order

Danielle Howard

With the recent Equifax fiasco, we reached out to clients, providing a link and instructions to check to see if they had been compromised and next steps. We got several e-mails and phone calls of gratitude. That event, along with the natural disasters affecting so many, has me focusing on organizing and protecting your financial life.

What would your spouse or family have to do in the event that something happened to you or to your home in order to keep juggling all of the financial balls you have up in the air? Who knows how to get into your computer, tablet or phone? Have passwords been recently updated and communicated? Update passwords and make sure someone else knows how to access them. Check out or dashlane as possible tools to assist you in organization of passwords.

Are you making piles and mulching leaves? Take the time gather the piles and mulch (shred) old financial statements and paperwork you no longer need. Supporting tax documents should usually be kept for seven years, but many other papers can be shredded. In the past, you needed to keep track of stock purchases in order to establish your basis when you sold them. With the passage of Dodd-Frank, brokerage firms now are responsible in tracking your purchases, and that information moves forward if you transition accounts. If you had made investment purchases prior to 2010, you will want to keep those original purchase confirmations.

What goes in a fireproof safe at home versus what should be stored in a safe deposit box at the bank? Store things that you need to get your hands on quickly in the event of an emergency such as medical directives, durable powers of attorney, revocable living wills, health care proxies, passports, life insurance policies or annuity contracts. You should also keep an inventory of what is held in your safe deposit box, as well as an updated inventory of all assets, where they are held and who to contact in the event you are not around. This would include your attorney, financial advisor, CPA and possibly medical practitioners or other professionals in your life.

A safe deposit box at the bank should hold only things that are valuable, that can’t easily be replaced, and that you do not need to have quick access to. This may include stock certificates, coin collections, jewelry, car or home titles. It is also a good place for original birth and death certificates, Social Security cards, marriage or divorce decrees, military discharge papers as well as home inventory (in case you need to file an insurance claim). If you are the sole lessor of the box, consider putting someone else on the lease. Make sure it is someone you trust, as they have the same access as you do. If you are no longer able to personally get to the bank, they can get ahold of the contents.

Consolidate investment accounts. Do you have various employer sponsored plans, or different IRA accounts that you have started over the years? You can rollover 401K and other plans from previous employers into your own personal IRA and consolidate accounts. If you are younger than 59 ½, and have cash flow needs, consider your options. If you left your employer in or after the year when you turned 55, you may not have to pay the 10 percent early withdrawal penalty on distributions. In this case, you don’t want to roll the 401k over into a personal IRA, where you would be penalized for taking distributions before you turned 59 1/2. You need to make sure account types match up. Roth accounts (money put in after tax dollars) need to be combined with other Roth accounts. You can’t move a traditional IRA into a Roth IRA without incurring taxes on the income. This would be a “conversion,” not a rollover.

Do you have like titled accounts at different institutions? Many people think they are diversified, when in fact they have a lot of investment holdings that “overlap.” Check your asset allocation from a comprehensive perspective and align your investment strategies with your goals. Make sure the fees you are paying provide you with the value and services you want and will benefit from. Done correctly, there will be minimal tax implications. Discern your opportunities to harvest gains and losses now to raise cash and strategically plan for 2018.

I hope these ideas get you started on some fall projects. Pick out one evening a week to turn off the TV, log out of FaceBook and get intentional about what steps you want to take to get financially organized. In no time, you will reduce overall stress, sleep better and have the peace of mind that you and your family are better prepared to face life’s fiscal challenges.

Danielle Howard is a Certified Financial Planner practitioner. Her office, Wealth By Design LLC, is in Basalt. Visit her at Advisory Services offered through Cambridge Investment Research Advisors Inc., a Registered Investment Advisor. Securities offered through Cambridge Investment Research Inc., a broker/dealer, member FINRA/SIPC. Cambridge and WBD are not affiliated.

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