Consolidating Your Savings
Simply put, consolidating your savings is taking the money you have with several different financial institutions, and putting it together in one place, to take full advantage of one plan.
Consolidating your savings into one account can make managing your investments simpler, lead to less confusion or stress, and potentially mean more money for retirement.
- First, you may be able to save on management fees. Every investment comes with fees, usually shown as a percentage. The percentage may sound small, but even a 0.75% reduction in fees can mean thousands of dollars more in your piggy bank for retirement, without having to increase your contributions.
- Second, consider your investment returns. Having your savings in one place provides you with an overview of your investments. This enables you to periodically review and rebalance your investment mix and determine the amount of investment risk you're comfortable with. Since various assets perform differently over the short and long term, doing this can also help ensure you're not missing an opportunity to earn more on your investments.
- Third, consolidating your savings can make it easier to keep track of your investments. Managing your household finances can be difficult enough. Having multiple savings plans in multiple places adds complexity. Keeping track of your investment performance, investment risk, and the associated fees is much simpler when you have just one plan and one statement to monitor.
Simply put, consolidating your savings can potentially save you money, make your investments easier to track, and potentially mean a difference of thousands of dollars in income when you're ready to retire.
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