If you look forward to a less complicated financial life in retirement, here’s one way to help make it happen: Consolidate all your investment accounts at a single financial institution. On top of that, major brokerages typically purchase what's called excess SIPC insurance, which can extend your coverage into the millions of dollars.
If you're concerned about whether your money will be safe sitting in a single institution, bear in mind that most major brokerage firms are members of the Securities Investor Protection Corporation (SIPC), which provides coverage up to to 0,000 per customer in case the institution goes bust. (MORE: 4 New Online Money Management Tools Worth a Try) A Painless, Low-Risk Money Move But aside from simplifying your life, merging your accounts can offer another surprising payoff: Consolidating your finances can make you a better saver, according to a recent University of Kansas study. Fortunately, merging your money is fairly painless and the risks are negligible or nonexistent. It’s easy to drive yourself nuts trying to keep track of it all — and even forget an account or two if you’re not careful. Not to mention what might be lurking in your safe deposit box.(MORE: Don’t Become a ‘Shoebox Widow’) Though the research involved college students and bank accounts, Promothesh Chatterjee, an assistant professor in the university's school of business and one of the study's authors, believes there's also a lesson for retirement savers. Often, the more money you have at a brokerage or mutual fund firm, the less you’ll pay.
"Since the basic psychological processes remain the same across different age groups, I think the findings will apply to older people as well," he told me. For example, the mutual fund behemoth Vanguard divides its customers into four classes, from Standard for those with less than $50,000 in stocks, mutual funds and ETFs (exchange-traded funds) to Flagship Services for investors with more than $1 million.