Ben Franklin knew a bit about organization and time management—at least, his words suggest as much. He said, “a place for everything and everything in its place.” He also said, “Don’t put off until tomorrow what you can do today.” We think both are good advice. Many seniors could benefit from heeding these wise words when handling their financial records. Do you have jumbled piles of papers in drawers or filing cabinets? If so, finding what you want when you need it can be challenging and frustrating. If you don’t have an effective system in place, how can you begin to create one?
Find time to organize finances during independent senior living
Retirement may provide the time you need—an hour or so daily over several days—to devote to the task. This can be an ideal project for retirees enjoying a time of independent senior living. The long-term payoff will be worth the effort. The next time you need a certain document, simple—you should be able to find it.
Start by gathering all your financial documents. Then, separate them by category. Here are some recommended by AARP:
- Bills to be paid – credit cards, utilities, medical, car payments, etc.
- Retirement – Social Security, disability, pension, 401(k) and IRA statements
- Banking – checking and savings account statements
- Legal – wills, advance directives (living wills), powers of attorney, trusts, lawsuits, property records, attorney fees
- Loans – mortgage contracts and payments, auto and personal loan agreements
- Insurance – home, vehicle, life and long-term care insurance policies
- Investment – stocks, bonds, money market funds, annuities
- Medical – health insurance benefits and statements, paid medical invoices
- Taxes – tax statements, income tax returns, current tax-deductible expenses
- Warranties – unexpired warranties for appliances, electronics, medical equipment and other major purchases
Create and label a file folder for each category. In folders with few contents, place the items in chronological order, with the most recent on top. For folders with more paperwork, try separating documents into sub-categories before arranging them by date order. List relevant names and contact information on each folder.
It’s best to store some documents in a fireproof lockbox: wills, deeds, social security cards, education and military records, marriage licenses, divorce decrees, funeral plans, private loan agreements, stocks, and bonds.
You may wonder how long to keep certain documents. “Forever” is rarely the correct answer. For guidance on retaining types of records, we direct you to finance guru Suze Orman, who answers the question, “What personal documents should you keep and for how long?”