Itemize Your Assets
If you’re like a lot of people, you’ve probably changed jobs or even careers many times over the years. You probably weren’t thinking too much about retirement, even if you did participate in some employer-sponsored retirement plans or open a few IRAs here and there. If you’ve reached midlife, there’s a good chance you have a number of plans and accounts, although you may not know exactly where everything is and how it’s invested. Now it’s time to get organized.
It may seem a daunting task; after all, many of your friends (and perhaps you, too) seriously wonder if you will ever be able to stop working, let alone live with any degree of comfort or security after that. It’s easy to procrastinate when you don’t quite know where to start – and aren’t sure you’ll like what you find. That’s why we created this tutorial, to list the steps that will help secure your future.
Inventory Your Online and Paper Files
The first step is to take stock of what you know you have and search for anything you can’t locate or could have forgotten. Depending on your age and how complicated your life has been, you could have anywhere from five to 15 or more accounts scattered around. Look both for retirement accounts and for other assets you might have that will add to your retirement funds.
Start by making a list of all your jobs, retirement accounts, other investment and bank accounts, and insurance policies, going back as far as you can remember. Start with what you receive now – the monthly reports from your bank or broker, any mail or email you get from current or past employers and tax records for the last few years. As you dig back from today to your first jobs, think about any other assets you might have acquired, such as savings bonds you got as a high-school graduation present or that life insurance policy your father said he bought for you. This may involve some real detective work. As you gather the information, enter it on a list or spreadsheet and file the backup information where you can get to it later. Include names, values, custodians, carriers, account and policy numbers, and contact information for all the people and/or institutions who hold these items.
Locate Lost Assets
You may not remember everything you have – or find that you have lost the records over the years, especially if you’ve moved a lot. Moving also means that plan custodians may no longer have your current address. Below are some ways to find lost or misplaced assets. If you think there’s the slightest chance, it’s worth feeding in your name and seeing what pops up. You could have a pleasant surprise.
– Financial and Retirement Accounts. The easiest way to find lost IRAs or other retirement-plan accounts is to locate the plan’s custodian and make a telephone or online inquiry. Of course, that company may no longer exist due to merger, takeover or rebranding. If you can find the new name or owner, the present corporate form of that custodian should still have your records. If you can’t locate an old statement, try looking at your tax returns to see if it is listed. If you took any type of distribution, there should be a copy of form 1099-R listing the custodian and account number. If you only made contributions, perhaps there is information about the custodian on one of the worksheets in the return or in the notes. If all else fails, try contacting the National Association of Unclaimed Property Administrators (NAUPA). This conglomeration of state unclaimed-asset administrators holds hundreds of millions of dollars of unclaimed assets, including uncashed checks, IRAs and retirement plans, brokerage and investment accounts, stocks, bonds and utility deposits. Much of this has been turned over to them by financial institutions that are required to do so when they are unable to locate the rightful owners of those accounts or assets after a certain time period. Go to www.unclaimed.org, choose the state or states in which you believe your accounts or other property were opened or located, and do a free search.
– Life Insurance. If you purchased a policy and can’t find your paperwork but remember the name of your carrier, an Internet search followed by a phone call or online inquiry should quickly get you a replacement copy. Find out how much cash value is in the policy, if any, and the amount of its death benefit; whether it is still in force or how much it will cost to reinstate it if it has lapsed. If a relative bought you a policy during childhood, and the paperwork that he or she gave you when you graduated from high school has long since disappeared, then a polite inquiry may be necessary. If you are unable to recall your policy’s carrier – and there’s no one in your family who might know – try a database search service such as www.findlostlifeinsurancepolicy.com. Billions of dollars of unclaimed death benefits are waiting for beneficiaries to collect them.
– Savings Bonds. Finding misplaced savings bonds is now easier than ever. Simply log on to www.treasurydirect.gov and go to the individual section to do a search. The site will tell you which bonds you own, whether they have matured and also whether they are still paying any interest. If you have paper bonds still lying around, take them to the bank either to cash them (if they have matured) or convert them to electronic form, the most convenient way to own bonds.
– Bank Accounts and Safe Deposit Boxes. Although you might be able to find lost bank accounts or assets by contacting the NAUPA, you will not find them there if the bank has become insolvent. If that happened, your monetary accounts should have been turned over to the FDIC for safekeeping. Anything you kept in a safe deposit box will be available through the new bank that replaced the previous insolvent institution. Safe deposit box items that have not been claimed after a certain time period are turned over to the unclaimed asset administrators of the state in which the bank was located. Go to www.fdic.gov to make an inquiry.
Add In Pension Payments
Very few people who are middle aged or younger still participate in defined-benefit pension plans, which provide a specific payment at retirement. But most will receive a monthly Social Security check. Be sure to include any payments to which you are entitled on your spreadsheet.
Social Security. It’s worth checking with Social Security to make sure earnings from all your jobs are factored into your benefits. Believe it or not, the SSA has hundreds of billions of dollars in unclaimed wages that need to be included in benefit calculations!
Pensions. If you know that you are entitled to receive payments from a defined-benefit account from a previous employer, but you lost the information about the plan or the employer became insolvent, contact the Pension Benefit Guaranty Corporation (PBGC) at www.pbgc.gov and enter your information. Make sure the organization has updated contact information for you so that the money can be paid to you at retirement.
Complete Your List
Once you have a detailed list of your assets, you are ready for Step 2.
The Table of Contents
- 1Itemize Your Assets
- 1.1Inventory Your Online and Paper Files
- 1.2Locate Lost Assets
- 1.3Add In Pension Payments
- 1.4Complete Your List
- 2Determine Your Objectives
- 2.1Your Risk Profile
- 2.2Your Investment Objective(s)
- 2.3Where Do You Fit?
- 2.1Evaluate Performance
- 2.2Getting Started
- 2.3Your Money, Your Profile: How Good a Match?
- 2.4But Is It a Good Growth Fund?
- 3Organize Your Assets
- 3.1What You Can Consolidate
- 3.2What Should Stay Separate
- 3.3What Should Be Replaced
- 3.1Plan For The Future
- 3.2How Much Will You Need?
- 3.3Making a Financial Plan
- 3.4Revisiting Your Assets
- 3.5The Bottom Line