Schedule Of Assets And Its Importance For Retirement and Financial Planning

As the year draws to a close, annual tasks like portfolio re-balancing and spring-cleaning come into focus. For me, none is more important or gleeful than updating my Schedule of Assets. Because this 1 document provides a comprehensive snapshot of my financial position at-a-glance. Sort of like drumroll moment for my decisions and actions over the past year.

The thought processes when updating the Schedule of Assets are of reflection, honest assessment, lessons learnt and celebrating successes. I touched on it briefly in a post about writing a will but due to its usefulness and importance, I’d like to expand on it.  

List of Assets 

To start with – what is Schedule of Assets? It is a detailed inventory of all assets, physical as well as digital. Below is how a Schedule of Assets should look like.

Assets – Provide a brief description and categorise each by type of asset. For e.g. real estate (with address), bank accounts (account numbers), investments (stocks/bonds), insurance (type & policy number), personal property (car with licence plate) or collectible (art).

Digital Assets – As our world becomes more digitalised, so do our digital assets and online  accounts. Be sure to include e-wallets (PayPal, Apple Pay), online trading accounts, crypto-currencies, domain names and social media accounts.

While most social media accounts may not have financial value, they can have tremendous sentimental value. Include these for completeness and ease of management, especially upon demise. This is because the Schedule of Assets is an attachment to the will. So by capturing everything you own in this 1 list, you can keep track and update easily.

Not Forgetting These

Prepaid Items – From time-shares to gym membership to chiropractic packages, some of these can run up to a tidy sum. Provide proper description and location of these prepaid items, estimated value and contact information.

Ownership – State clearly whether each asset is owned individually, jointly (with spouse or business partner) or in a trust. Go 1 step further to include respective contact details.

Market Value – While it’s good to be as accurate as possible, don’t be overly concerned if exact values are difficult to quantify. Market values are dynamic and will change throughout the year anyway.

Liabilities – Indicate clearly any borrowings against each asset, including lenders name and quantum of loan remaining. This will show what your own vs what you owe. So in effect, the Schedule of Assets becomes a Wealth Statement.

Location – State physical location and access information of each asset, especially overseas real estate, safe deposit boxes, stored valuables and collectibles.

Income-Generating Assets – Include the income generated from such assets (eg. rental property, dividend stocks) so you have clarity over the various income streams you have. These can then be relied on for retirement planning and/or budgeting.

Usefulness

For those who are planning for retirement (and who isn’t?), the Schedule of Assets is particularly useful because:

• Financial Overview: It offers a comprehensive overview of your financial resources by category such as savings, investments, real estate and other possessions of value accumulated over the years.
• Retirement Planning: Knowing the value and nature of assets is the first step towards planning for retirement. It helps ascertain the lifestyle and crystallise your options for retirement
• Expense Management: Provides clarity of financial obligations, now and in the future, for better expense management. This leads to better informed decisions, budgeting and discretionary spending.
• Risk Management: Retirees are generally more conservative risk-wise simply because there is little time or opportunities to recover from shocks. The Schedule of Assets highlights risk exposure, enabling adjustments for a more secured financial position.
• Estate Planning: The Schedule of Assets, together with the will, are the documents relied upon for wealth distribution to heirs and beneficiaries. A detailed Schedule of Assets simplifies and hastens the tasks for Executors or appointed Administrators in the instance of dying intestate.
• Healthcare Planning: The Schedule of Assets helps to evaluate whether there are sufficient resources to cover potential medical expenses or whether additional planning, such as long-term care insurance, is necessary.

Keep It Updated

As with most documents, update the Schedule of Assets regularly to retain its purpose, usefulness and relevance. A good rule of thumb is yearly or whenever there are significant changes to your position, such as the acquisition or sale of a property. 

Much can change in a year that can impact cash holding, stock portfolios and property value. External events like inflation to new regulations necessitating sale of an investment property to, God forbid, being scammed.  

An updated Schedule of Assets provides an overview so different financial strategies can be deployed to meet changing needs, market conditions, and unexpected events. You are aware of your personal standing and this helps you to formulate plans to protect what you have,  minimising shocks to your assets.

Not Just A List

The Schedule of Assets is not just a list of assets and liabilities. It has helped me organise my financial resources, declutter physical possessions and to spring-cleaning Apps and digital accounts no longer in use. You’ll be surprised at the number of these when you do this exercise. 

And I highly recommend to include social media accounts. This way, they can be property managed and according to your instruction when the inevitable happens. 

I find it quite eerie to receive automated messages like “Congratulate so-and-so for Xth year at  Company” or “Help so-and-so celebrate her birthday” when the person had passed on. You owe it to yourself and your personal and professional network to manage your digital footprint.

Worth It

While it can be overwhelming when first setting up the Schedule of Assets, but once completed, you will enjoy countless benefits like better control, clarity and peace of mind. It crystallises the manoeuvres you can adopt in an emergency, if you should do more of something that improves your situation or stop something with negative outcome. 

An updated Schedule of Assets is an actionable list that is useful not just while we are alive but extends its usefulness beyond us. It is a succinct document providing clarity to life…and in more ways than just financially.

Now, isn’t that worth losing some sleep over? In fact, a friend updates hers monthly because she gets a kick out of knowing her exact position 🙂

Clarity…now and beyond,

Savvy Maverick

(Main image: Malaga Puerto Marítimo, Savvy Maverick)

 

Disclaimer: The views expressed are drawn from personal experiences and do not constitute financial advice in any way whatsoever. Nothing published here constitutes an investment recommendation, nor should any data or content be relied upon for investment activities. Please seek independent and thorough research before making any financial decisions, including consulting a qualified professional. Data and information cited from sources will not be updated after publication.