Financial consolidation can simplify life for senior citizens

Posted Aug. 22, 2012, at 9:46 a.m.
Last modified Aug. 27, 2012, at 7:51 a.m.

Many senior citizens for whom I have worked believe that by having several bank accounts and dividing their money among them, their finances would be more secure and private. However, having multiple bank or credit union accounts is really unnecessary today.

Here are some reasons to consolidate accounts into one bank:

• The Federal Deposit Insurance Corp. protects a person’s funds up to $250,000 per each account ownership category. An account under an individual’s social security number would be protected up to $250,000.

If more coverage was necessary, than a new account with a different social security number would need to be established. An example could be an account for a spouse or a joint account with a child.

• The Privacy Act of 1974 requires banks to protect the records of personal identifiers, including such information as name, social security numbers, or other identifying numbers.

• Tax returns should have shorter time spent in preparation.

• There would not be as many bank accounts to reconcile or files to maintain.

• Less mail would be delivered to an individual’s mailbox.

There are other ways for senior citizens to simplify their lives financially:

• An individual who has more than one financial advisor should think about going with one company. As with bank consolidation, this would result in fewer tax reports, statements, and mail.

• An individual holding stock certificates should consider turning them over to a financial advisor, who will report all dividends and capital transactions on one Form 1099.

• Electronically pay household bills directly from a bank account. This will eliminate writing checks and receiving monthly statements in the mail. An individual without access to a computer to complete a bank‘s on-line enrollment application can call the companies that send the bills; these companies will either mail a form to be completed or set up electronic payment over the phone.

• Downsize record-keeping by filing only the current year’s statements, then just the year-ends for a few years. Keeping each year’s tax records for seven years will be sufficient for as long as an individual has to file a tax return.

Realizing that changes must be made could be a difficult transition; start off with minor changes, such as consolidating assets. Leonardo DaVinci said it best: “Simplicity is the ultimate sophistication.”

Marie Lander, senior registered financial associate, is owner of Bookkeeping for Seniors/ Changing to Simplify, specializing in financial planning for elders. For more information, call (207) 944-6762 or email lander.marie@gmail.com.

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