Consolidating your Financial Accounts

When it comes to simplifying your personal finances consider consolidating your accounts.

Consolidating your Financial Accounts

Over the course of a career it is very possible for individuals to accumulate multiple checking, savings, brokerage, and retirement accounts. The likelihood for this increases as we get married, move, change jobs, etc., but it can unnecessarily impede your financial progress. That said, we encourage households and individuals to review their existing accounts to make their savings and investments more efficient.

Furthermore, you can consolidate all your accounts to one or two institutions. For example, you can limit your checking and savings account(s) to one bank, and your investment and retirement accounts to one financial institution.

Below are some potential advantages to account consolidation:

  1. Estate Planning
    • Oversee fewer accounts as opposed to many at separate financial institutions.
    • Streamlines recordkeeping for surviving spouse.
    • More efficiently review account beneficiary information.
  2. Investment Planning
    • Allocation is more efficient to one account rather than multiple accounts.
    • Performance is monitored over fewer accounts.
    • Automating your contributions or withdrawals in retirement is simplified with one account versus multiple accounts.
  3. Tax Planning
    • Fewer statements alleviates the task of income tax reporting.
    • Cost basis is better managed.
  4. Cash Flow Management
    • It is easier to track income and expenses.

Where do you start?

Take the time to list all your accounts, and it may become abundantly clear after listing all your accounts that it makes sense to consolidate! You may want to list these accounts in the format below:

Checking/Savings
Account #1
Account #2
Account #3

Non-retirement/Investment Accounts
Brokerage Account # 1
Brokerage Account # 2
Brokerage Account # 3

Retirement Accounts
Traditional IRA # 1
Traditional IRA #2
401(k) # 1
401(k) # 2

You may want to work an accountant or financial advisor to make you are aware of any tax consequences that may arise from consolidation. The Certified Financial Planners™ at PFA, LLC are here to help you with all your planning needs. Let us know how we can help you reach your financial goals.

Securities offered through Independent Financial Group, LLC, Member FINRA/SIPC.  Advisory services offered through Plotkin Financial Advisors, LLC.  Plotkin Financial Advisors, LLC and Independent Financial Group, LLC are not affiliated.