Saturday, December 21, 2013

What's in a title.

In previous $ Tips I talked about beneficiaries and how important it is to make sure you keep them up to date.

In your IRA, 401k or 403b and life insurance policies, you name beneficiaries. Those persons are entitled to receive all the money in that particular account.

No matter what your Will might say, the named beneficiaries get whatever is held in that account at your passing. It overrules your will AND it avoids Probate. (meaning your heirs can get the money almost immediately without court reviewing the will.)

All this is building up to the TOD - Transfer on Death.
This is one way to ensure a particular person (or persons) receives the contents of your account at your death. It works similarly to naming a beneficiary. It applies to taxable accounts not tax-deferred (IRA,401k,SEP).

When you open a brokerage account, mutual fund, CD, checking or savings account you may want to open it as a TOD account. Many folks would open a "joint" account so money could pass on to a spouse, son, daughter or friend quickly and easily. But that would also give the spouse, son or daughter, friend access to the money as a "joint" owner. A TOD account gives your beneficiary quick access but only at your passing.

So the same caution is to remember to keep your beneficiaries current.
After a death, a divorce, or birth review your beneficiaries so the right persons get the assets.

Be $ Smart!

Tuesday, December 17, 2013

How are you doing financially?

Report cards, progress reports, etc. all tell us how we are doing in some segment of our lives.

So how are you doing financially? How do you measure your progress?
Have you ever sat down and examined how you stand financially? If not, now would be the perfect time with the close of 2013 just a few weeks away.

Year-end statements will be delivered early in January so get a pen and pad to make two lists: 1) all the things (assets) you own and 2) all the things you owe.

You may own a car, a boat, a house or condo, a 401k, an IRA, some land, gold jewelry, artwork, stocks and bonds. List the value of these items in one column; add it up.

The second list will show all you owe: student loans, mortgage, home equity loan, credit cards, personal loans from friends or family. Tally these values.

Now subtract the amount owed from the amount owned - ta da! there you have your NETWORTH. You have just produced your very own Networth Statement!

That number is just a snap-shot in time - today. The number will constantly change because you are earning and saving, because investment values fluctuate daily, and because you are paying down your debt.

The trick is to track this number consistently - once a year, semiannually or quarterly. Once or twice a year is best. This is how you know if you are making progress - or not. You want the numbers to grow and improve. If that is not happening, figure out why and make some changes.

Numbers don't lie - they provide information - you make the decisions.

Friday, December 6, 2013

Money for...

When I was 12 my father took me to the local bank to open a Christmas Club account. I committed to depositing 50 cents per week, every week to save for next Christmas. 52 times .50 comes to $26 which was a tidy amount of money at that time considering NYC subway tokens sold for 15 cents. Imagine my excitement walking out of the bank 12 months later with all that "money for" Christmas gifts!

"Money for..." is a simple way to accumulate cash for a specific purpose - a new car, a long-deserved vacation, a supersized TV.

"Money for..."the opportunity to say "take this job, etc."

"Money for..."financial independence.

"Money for..."freedom to do as I please.

"Money for..." the relax and enjoy time of my life.

If I were to say to you: "now is the time to save for retirement", you might respond: "I'm never going to retire" or "I'm too young, I have plenty of time!" I can assure you that time flies and whatever your reason may be, now is the time to decide what you want "money for" and open that Christmas Club account.