Not long ago I decided to transfer some of my retirements funds from one brokerage company to the other. For reasons that are too annoying and too complicated to get into, I had to do this manually through what’s known as an “indirect rollover”. The mechanics of it are simple: Brokerage #1 cashes out my current IRA (Individual Retirement Account) and sends me a check. I deposit that check into my normal bank account, then I call Brokerage #2 and tell them I want to take that exact amount of money and put it into an IRA with them.
If you do this correctly, the transfer happens tax-free. If you do it wrong, you can end up with a hefty tax bill. There are really only two rules to worry about: get the money into the new account within 60 days, and tell the IRS about it when you file your taxes. None of this is difficult, so long as Future Katrina does everything she needs to do. So I made sure to set her up for success.
I wasn’t too worried about doing the transfer in time since it would theoretically be done in about a week. However for added security and peace of mind I put two big reminders in all caps on my calendar for the day when my 60 day clock would run out, as well as 10 days before that so I’d have ample warning.
The thing I was more worried about was remembering to tell my tax accountant about the whole thing. Brokerage #1 said they would send me tax forms for the transfer, but I didn’t want to risk them getting lost in the shuffle or trying to remember the terminology to tell my tax accountant, especially because I was also transferring some other funds between the two companies that would be taxed differently. I have a folder where I keep all the tax-related forms and paperwork I receive throughout the year so it’s easy to find them all come tax time. I took out a sheet of paper, scribbled a big note to myself with all the key information about the transfers, and put it in that folder. When it’s time to collect my paperwork and send it to my accountant, there will be a big obvious message from Past Katrina ensuring that Future Katrina does the right thing.
There are two key components that made this work, one mental and one practical. The mental one is the practice of thinking ahead, of noticing when a task or project isn’t done and imagining what the future version of yourself will need. This mentality is what made me think to add reminders to my calendar and write a note for my taxes. The mental component will often manifest as worries before you are able to turn them into a plan.
The practical is the set of trusted systems to store all that forward thinking in. I already had a calendar that I referenced regularly, and a spot for tax papers to live. Without these things in place it would have been much harder to prepare for Future Katrina, because I wouldn’t know how to get messages to her. I wouldn’t be able to accurately picture the moment when she would need my help the most, or where she would look for that help. But because I trust these systems, I can trust them to carry the info along to the future and find Future Katrina at exactly the right moment. They are my time machine, and Tax Day Katrina is going to be very happy they were in place.