The New Commonsense Guide to Your 401(k): Rebuilding Your Portfolio From The Bottom up

Chapter 68. Paperwork Matters

BEING ORGANIZED is important at all stages of your financial life. Yet most of us never get around to it and we still manage to muddle through. When you're headed for a big life transition, though, order is essential.

Now you will need records that show how much you paid for your home and the cost of improvements you've made. You may need copies of your cash-value insurance policies, which can serve as a source of income in retirement. You'll need your birth certificate to apply for Social Security. And you must have pension records, investment records for stocks, bond and mutual funds, and records that show contributions and withdrawals from retirement accounts.

You also need to pull together some financial statements for your personal business. That means figuring out your net worth and then seeing what you might do to spruce it up a bit as well as drawing up an income statement or a budget that shows what's coming in and what's going out.

Start by pulling together these things:

• A copy of your most recent income tax return.

• Records of liquid assets. You need to know exactly how much you have in checking and savings accounts, bank certificates of deposit, and money market accounts.

• Copies of life insurance policies with records of accumulated cash values. You should receive an annual statement from the insurer that shows current cash value as well as the current death benefit. On many policies, the death benefit increases as the policy generates what are ...