About to Retire? Aim to Simplify Your Finances

As you head into retirement, you might be looking to move to an apartment or smaller house that will need less upkeep and that's closer to shopping and public transportation.

But while you're simplifying your life, also give some thought to streamlining your finances, either to make things less complicated for yourself or to ease the burden on your spouse or partner should you die first. Here are some steps to consider:

Pay off debt. Even if you can't get your mortgage paid off by retirement, see if you can eliminate other debts, including car loans and outstanding credit card balances. That'll leave you in better financial shape--and mean fewer monthly bills.

Use direct deposit. New Social Security recipients must have their benefits deposited electronically to a bank account or debit card, while current recipients have to make the switch by March 2013. You might also arrange direct deposit of other income, such as any traditional company pensions, stock dividend payments and retirement account withdrawals.

Automate bill payments. If you're comfortable with the idea, you can arrange automatic payments from your bank account to the IRS, utilities, credit card companies and other firms you pay regularly, so you are less likely to miss a payment. Just make sure you keep enough in the bank to avoid overdrafts. If you'd rather follow your own schedule, you can make your own online payments. Either way, you'll save on stamps and trips to the mailbox.

Consolidate accounts. If you have 401(k) or similar retirement plan accounts at old employers, consider consolidating them in a rollover Individual Retirement Account. That will reduce the number of investment accounts you need to track and make it easier to review your overall portfolio because your investments will be in one place. It will also make it easier to calculate your required minimum IRA distributions once you turn age 70½ and need to start drawing down your retirement accounts. Similarly, if you have multiple credit cards, banks accounts, mutual fund accounts and brokerage accounts, you might aim to simplify your finances. Keep in mind that consolidating investment accounts could trigger tax bills and might mean paying fees or commissions. As you streamline your financial accounts, also look to streamline the financial professionals you deal with. Even if you have a good grasp of your finances, your spouse or partner may not--and it'll be easier for him or her if there's a single banker or advisor who has a handle on your overall financial situation.

Get statements by email. You can have bank statements, utility bills, credit card statements and many other account statements sent to you via email. Try to have all statements go to a single email address--and make sure your spouse or partner has the password. Want to keep some of these records? You can always print the emails or store them electronically.

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