Ignorance is bliss…until it isn’t
I grew up hearing “ignorance is bliss” and largely believing it to be true, mostly for things I found distasteful to face: like tax preparation, mammograms, 401k statements and that thing in the closet. That thing=the dress I keep saving because someday I AM going to get into it, trust and believe!
Wait. Did a financial person just say they didn’t like facing 401k statements?!? Screeeeeeeeee…..
Before I address my specific why about facing 401k statements, let’s address some universal realities:
Overload + Overwhlem=Over it Already
It used to be that statements of every description arrived by post. There was a rhythm, limited by the speed of printing, envelope stuffing, and the time necessary for wending their way through the postal system, traversing actual geography to arrive in your mailbox. Now, they can be digitally delivered at the touch of a button, unless you specifically require paper.
Advantages of the digital system:
not so much physical weight in our mailboxes, or on the backs of our mail carriers
At-will (within reason) digital retrieval when needed
Not so much physical paper to organize and maintain, forever wondering when and how was it safe to dispose of it
Disadvantages of the digital system:
the physical weight was simply transformed to digital weight-now its clogging up our inboxes, possibly requiring digital storage fees
it is buried among so many messages that no amount of time committed to “unsubscribe” activities will ever stem
it is still possible, if not MORE possible, to be literally out of sight, out of mind because you have to go look for it, versus being forced to deal with it when it physically arrived in your mailbox
In addition to the bombardment of information contributing to the overload, we have its equally un-fun compatriot: overwhelm. We have personal responsibilities, professional responsibilities, civic responsibilities, work email, home email and still some ‘snail mail’ all jockeying for our limited time and equally, if not more limited, attention. And it all feels important. And it often all feels important all of the time. So, it does not require a great leap of faith that many of us are quickly rendered immobile, caught now in a digital quagmire. Add to that the potential for unpleasant disclosure in those statements, and it becomes SO EASY to just scroll on by, telling ourselves we will come back to it later, to say nothing of the many, many times our attention is necessarily elsewhere and we have no choice but to slap it in a digital file to be handled at a later time.
The inevitable result of Overload and Overwhelm is—>Over it Already. And Over it Already hides a multitude of potential problems that often calcify into intractable landmines that can blow up an otherwise steady life, or send an already precarious situation over the brink.
Thanks for stating the obvious and making everyone feel squirmy, Jennifer, now what???
Enter an unlikely hero, that’s right, Tax Preparation Season has entered the chat!
I’m sorry, WHAT?!?! What does ‘Tax Preparation Season’ have to do with this, and how can it POSSIBLY be any kind of hero leading to (gasp!) solution(s)?!?
Hear me out…
Tax time is THE PERFECT TIME to get a handle on statements. You have to have them to hand over to your tax preparer or to reference as you prepare your own tax return(s). During Tax Preparation Season, almost everything is in one place, at the same time, in service of your annual filing, whether you file April 15 or on extension. And if you have not had a moment over the foregoing 12 months, now is the time to open and review everything. It is the time to consider: do you have a system? If yes, is it working for you, or did you find some surprises? If you do not have a system, or the current one is not working for you, what system can you start NOW, to make periodic review possible, then easier?
It is time to take stock of what is where, what it is worth, whether it is (still) serving your needs, are you on the track you thought, and can your agent/spouse/partner access it if they needed it. I talk a little bit about some of this in an earlier note focused on the estate planning portion of your life (Protect.) and I mention it again, here, because it is a critical common thread running through our financial lives.
My point is: START.
Start at tax time to gather and review ALL statements. Absolutely any and everything tied to your financial life. From there, you can triage, then develop strategies to combat overwhelm with focused, periodic reviews for those items in the highest need category. In all likelihood, these are the items requiring consistent, more frequent review. But not everything is in the high-need category. And a system (Plan.) brings order to the chaos, giving us clear steps to follow and check off our list.
At the risk of yawning on into truly TLDR territory, this brings me to the 401k Statement. I won’t bore you with my riveting treatise on the travails of defined benefit v. defined contribution, so suffice to say that for me, facing the 401k statement is the one I have to work to open, read critically and act strategically. I share this that you, dear reader, may feel less alone. That even financial professionals find themselves at the mercy of market fluctuations, ever-changing legislative rules, and the pressures of competing priorities.
All this is to say: we know knowledge is power, and we can’t fix what we don’t know. No amount of not knowing ever helps. When it comes to our financial lives, ignorance is NOT bliss. So, gather those statements, open ‘em up, and let’s get going (Prosper.) on the road to Financial Fearlessness!
