Q2 2026

OUR GUIDE TO EVERY MILEPOST, JUNCTION, AND LANDMARK ON YOUR ROAD TO RETIREMENT

Have you ever gone to the store to buy new batteries…only to discover later that you already had some in a drawer you forgot to check?

What about going to the supermarket because the recipe calls for lemon juice…without realizing you already had a bottle that got pushed to the back of the fridge?

Or how about this: You bought a subscription to a streaming service to watch a specific show…without realizing you already had an account under a different email?

This sort of duplication of effort and expense can easily build up in both our finances and our home life. By the time they are ready to retire, many people may have multiple IRAs (Roth, Traditional, or Inherited) combined with one or more 401(k)s and multiple taxable accounts. Add to this a variety of savings accounts, credit cards, and accounts with mobile payment services like PayPal or Venmo, and you have the potential for massive financial clutter in retirement.

The reason this matters is that with clutter comes the possibility of additional fees, more money sitting around unproductively, greater potential for fraud, and a more complicated tax situation.

That’s why it’s always good for retirees to examine ways they can simplify their finances and reduce clutter by consolidating, combining, or rolling over various accounts into as few as possible. This can bring the following benefits:

• A clearer view of your financial picture, so you know truly how much you have to meet expenses, fund your dream lifestyle, and achieve your goals in retirement.
• Fewer logins and account details to remember and store (when done right) — which means fewer opportunities for cybercriminals to steal your identity.
• Reduced fees. Most types of financial accounts come with various management and administrative costs. These can really add up, so by consolidating, you may be able to reduce both the number of fees you pay and the overall amount.
• Higher compounding potential. Greater sums of money in one or two accounts can compound over time at a much higher rate than the same amount of money spread out among accounts and institutions.
• Reduced risk of forgetting RMDs or leaving money on the table. Once you turn 73, you are required to take a required minimum distribution from certain retirement accounts each year. Having multiple IRA or 401(k) accounts can increase the likelihood of forgetting to withdraw the correct amount or withdrawing the wrong amount.
• Less stress for your heirs. Someday, your heirs and beneficiaries will need to take over your estate, which can be a daunting, complicated process. By consolidating accounts well ahead of time, your loved ones will have less paperwork to deal with, fewer phone calls to make, and an easier time actually enjoying the legacy you worked so hard to leave for them.

Now, this doesn’t mean that all your accounts should be consolidated. Having multiple accounts can sometimes mean greater flexibility and more investment options. Consolidating may also have negative tax implications if it’s not done strategically. But generally, the more you simplify your financial picture in retirement, the easier it is to make it look however you want.

The previous article discussed financial clutter on a macro level. But clutter can occur on a micro level, too. For instance, in your investment portfolio.

As you know, your investment portfolio is designed to help you grow your wealth over the long-term within your specific risk boundaries. Most investors’ portfolios are built around one or more investment funds — a diversified assortment of various securities, such as stocks or bonds.

Generally speaking, there are two types of stock funds: Actively managed and passively managed. An actively managed fund is one in which the fund’s manager takes an active role in selecting which securities to buy or sell and when. Many actively managed funds have the express goal of outperforming the overall market, meaning they seek to outperform a benchmark index over a specified period. (The S&P 500 is a good example.)

A passively managed fund, on the other hand, invests in a pre-determined basket of securities and then stays put. Other than periodic rebalancing, there is no active buying or selling. These days, many passive funds are index funds. This is when the fund’s portfolio is built to mirror the securities in a specific index. (Again, the S&P 500 is a common example.) The goal here is not to outperform the market but to match it.

What does all this have to do with financial clutter? Well, actively managed funds typically come with higher fees than index funds. That’s because managing a active fund takes much more work. The tradeoff for investors, then, is paying a higher fee for the possibility of outperforming the market.

Sometimes, however, actively managed funds will start to look more and more like an index fund over time. That’s because the fund might be invested in so many different securities that its composition will resemble that of an index. This is known as closet indexing, and it’s not ideal because it essentially means investors will be paying the fees of an actively managed fund that behaves more like an index fund. In other words, the potential for outperformance drops, but the fees do not.  

Another type of portfolio clutter involves duplicate investments. This is when a portfolio contains different securities or funds that overlap.

For example, let’s say someone invests in two different funds, each from a different company…but both funds have a heavy concentration of tech stocks. This might make the investor feel diversified, but essentially, they are paying to own the same thing twice, doubling their risk.

Duplicate investing can occur with individual stocks, too. For instance, an investor might choose to buy shares in the ACME Corporation at the same time they are invested in a fund that also owns ACME.

On our team, we work hard to ensure our clients never have to worry about either closet indexing or duplicate investments. But if you have any outside investments, it’s important to be aware of investment clutter. An untidy portfolio can mean taking on additional risk and additional fees, all without ever realizing it.

This one is the hardest.

For many people, cars are almost like members of the family. Some of your favorite memories probably happened in them. Between commutes, errands, and road trips, you’ve probably spent almost as much time in your cars as you have in your house. You’ve invested hours and hours, and dollar upon dollar, in keeping your car(s) clean and running.

That can make it very difficult, emotionally speaking, to give a car up.

But while most retirees choose to hand the keys over when they physically can’t drive anymore, due to failing eyesight, slower reflexes, diminishing mental acuity, or some other reason, this decision is more about the financial reasons to consider downsizing your vehicular situation.

Now, when we say, “downsizing your car,” that can mean one of two things:

1. Trade in your previous car for a smaller, more economical model, or

2. Reduce the number of cars you have (most commonly going from 2 to just 1).

According to the Bureau of Labor Statistics, the average American over 65 spends over $8,000 per year on transportation, which accounts for roughly 14% of household spending. Essentially, that means a significant chunk of your expenses in retirement comes from owning a car…and of course, that number goes up the more cars you own, or if your cars tend to be big gas guzzlers, sports cars, or luxury vehicles.

Now, you should never get rid of something you truly need and use, or that brings you joy. The question you should ask yourself is, “Do I really need to have two cars in retirement?”

Or “Do I really still need a truck when I no longer need to haul anything?”

“Does it really matter if my car goes from 0-60 in less than 3 seconds if I never drive that fast anymore?”

“Do I really need all that cab space now that my kids are out of the house?”

Downsizing your car or reducing the number of cars you own because they simply aren’t needed anymore is one of the best ways to reduce expenses in retirement. Taking fuel costs, new tires, safety and emissions testing, oil changes, and, of course, insurance premiums off the table can potentially give you a lot more to work with when it comes to your monthly budget. (This is especially true as you move deeper into retirement, as insurance rates tend to jump over age 74.)

So, while it may be painful to consider, the question of whether to downsize your cars is one every pre-retiree should ask.

Because the answer may just get you where you want to go even faster than when you’re behind the wheel.

Minich MacGregor Wealth Management
21 Congress Street, Suite 203
Saratoga Springs, NY 12866

(518) 499-4565

www.mmwealth.com