How to Simplify Your Finances to Protect Against Future Memory Loss
Planning for retirement usually means thinking about income, investments, and expenses—but there’s one more critical piece that’s often overlooked: cognitive decline.
Whether mild memory issues or more serious conditions like Alzheimer’s, cognitive decline becomes more likely as we age. And that means the more complex your finances are, the more at risk your retirement plan becomes.
The good news? A simplified investment portfolio can make a big difference. It can protect your assets, ease the burden on your future self (and loved ones), and give you greater peace of mind today.
🧠 Why Simplicity Matters
As we get older, managing multiple bank accounts, brokerage statements, and investment types can feel overwhelming—even for those without memory problems.
Cognitive decline doesn’t have to mean losing everything—but it can mean making costly mistakes, missing bills, or falling for scams.
By simplifying now, you’re taking a proactive step toward protecting your financial future—even if your memory becomes less sharp later on.
🔍 What Is a “Simple Portfolio”?
A simple portfolio is one that:
- Is easy to understand
- Is low-maintenance
- Requires very few decisions
- Can be automated
- Reduces the need to monitor or tinker
In other words, it’s a set-it-and-forget-it plan that still delivers dependable income, growth, and stability.
🎯 How to Build One
Here are a few smart ways to simplify:
1. Consolidate Accounts
- Move all IRAs into a single provider (like Fidelity, Schwab, or Vanguard).
- If you have old 401(k)s, roll them into your IRA.
- Keep no more than one checking and one savings account.
- Use direct deposit and auto-pay to eliminate paper checks.
Why it helps: Fewer accounts means fewer passwords, fewer statements, and fewer opportunities for confusion or fraud.
2. Use a Single Fund Strategy
One of the easiest ways to invest is with a target-date fund or balanced fund. These funds automatically manage a mix of stocks and bonds based on your age and risk tolerance.
- Target-date funds adjust over time, becoming more conservative as you age.
- Balanced funds maintain a set allocation, like 60% stocks / 40% bonds.
Example: Vanguard Wellesley Income Fund (VWINX) is a popular choice for retirees who want low risk and steady income with minimal maintenance.
3. Consider a Bucket Strategy—Simplified
The “bucket strategy” involves dividing your money into 3 simple parts:
- Bucket 1 (Cash) – For spending in the next 1–2 years
- Bucket 2 (Income) – For spending in the next 3–10 years (bonds, preferred stocks, CEFs)
- Bucket 3 (Growth) – For money needed 10+ years from now (dividend stocks, REITs)
By labeling each bucket by purpose and time frame, it becomes easier to manage—even if memory fades.
4. Go With Dividend ETFs or Funds
Instead of trying to keep up with 20 different dividend stocks, you can use just 1 or 2 dividend-focused ETFs to get reliable income.
Good options include:
- VYM – Vanguard High Dividend Yield ETF
- SCHD – Schwab U.S. Dividend Equity ETF
These ETFs provide exposure to high-quality dividend payers, without the need to pick stocks or worry about changes.
5. Automate Everything
The less you need to remember or do manually, the better:
- Set up automatic withdrawals from your retirement account to your checking account.
- Reinvest dividends automatically, or direct them to your cash bucket.
- Use a bill pay service or auto-pay for recurring expenses.
6. Reduce Paper and Passwords
- Go paperless to reduce clutter and confusion.
- Use a password manager to safely store all your financial logins.
- If you prefer physical records, keep everything in one binder or folder and label clearly.
This also makes it much easier for a spouse, adult child, or caregiver to step in if needed.
7. Appoint a Trusted Contact
Financial institutions allow you to add a trusted contact—a person they can reach out to if they suspect fraud or memory issues. This is not the same as giving them access to your account—it’s simply a safeguard.
You should also:
- Name a Power of Attorney (POA)
- Create or update your will
- Consider a living trust if your situation is complex
💡 Real-Life Example: Jane’s Simple Strategy
Jane, age 74, was starting to feel overwhelmed managing her old stock portfolio. She had 38 individual stocks, 3 mutual funds, 2 bank accounts, and an old 403(b).
With help from her financial advisor and daughter, she:
- Moved everything to Vanguard
- Sold the individual stocks and moved into a dividend ETF (SCHD)
- Put 2 years’ worth of expenses into a money market fund
- Set up auto-withdrawals and automated all her bills
“Now I don’t worry about my accounts anymore,” she says. “And my daughter knows exactly where everything is.”
🔐 Final Tips
- Keep a written “financial roadmap” with your key account info, advisor contacts, and instructions. Share it with a trusted person.
- Review your setup once a year to make sure everything is still working.
- Think ahead, not behind—simplifying now prevents problems later.
✅ Bottom Line
Financial complexity and cognitive decline don’t mix. But with a little planning, you can build a simple, sturdy portfoliothat protects your money—and your peace of mind.
Less stress. Less paperwork. Fewer decisions. And more confidence that your finances are secure, no matter what the future brings.
📘 This blog post is adapted from my book:
Your Senility Portfolio: Safeguarding Your Finances When Memory Fades
Available now at Amazon.com in paperback and eBook formats.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or medical advice. Always consult a qualified professional before making changes to your investment or estate plans.