So, Do You Need Financial Planning?

Well do you need Financial Planning? In this article, I will show you how you can answer this question.

Immediately after we complete our college education, we automatically participate in a race call rat race.

Everyone started the race with a cart. In this cart, we have personal bills, loans and our allowance. As we are single, everything is good and manageable. We can spend what we earn without worry.

Then we meet our partners and get married. Thus we begin our next chapter in life. Our cart becomes heavier and we now worry about our spouse's bills and loans and kids allowance. Some of us must support our parents too. We may even need to bring our family to vocation. As we grow older, our carts get heavier and heavier. Do you have enough savings to meet these expenses?

As we know, life is never a straight and smooth path. We will encounter obstacles. Some of these obstacles may set us back in terms of our financial standing .If we do encounter a big obstacle (e.g. critical illness, operation, surgery, business failure) and need a huge sum of money to recover, Do you have enough money to meet this expense? What if the big obstacle results in us being permanently bed-ridden or out of work for a long time, what is going to happen to our cart? Do you have enough money to support yourself and family if that happens?

Many may say, well we have friends and relatives to turn to for help. But our friends and family have their own carts to pull too. If they help push our cart, who is going to push theirs?

We will all retire from work eventually. From then on till we all rest in peace, we do not have regular income but our life must still go on. We still need to pay our bills and we still need to eat. Do you have enough money to support yourself during retirement?

At old age, our body is no longer working as well as they used to. Our health conditions deteriorate, as we get older. We will need to seek medical help frequently. We may even need to employ a person to take good care of us. Do you have enough money to spend on these medical expenses?

So do you need Financial Planning? If you answer ‘Yes’ to all the above questions, then you are safe and need not worry about Financial Planning. Otherwise, I suggest you start thinking about it.

Offshore Banking - When It Pays To Go Abroad

While you might presume anyone with ‘money in offshore accounts’ is involved in some scurrilous business affairs, the truth is that anyone can use this form of investment as a totally legitimate way to defer or reduce your tax payments.

Locations for offshore accounts can be held in banks in British waters – the Channel Islands or Isle of Man for example, or you could look further afield to the Republic of Ireland or Luxembourg. As with other investments, there are different ways to send your money abroad, with different levels of risk attached.

Some of the benefits include current accounts with higher levels of interest – check out the high street banks, many of which offer offshore instant access accounts. These are a relatively safe way to invest. There are also ‘notice’ savings accounts which can yield exceptionally high rates of interest.

You may choose to put money into an offshore investment fund, which is similar to the normal onshore type, only you usually find that you pay a performance related fee to your fund manager. This could mean that they have more incentive to make sure your money is working hard for you. Check investment companies like Schroders and Gartmore for this type of fund.

Money funds are a high risk form of investing – your funds will be pooled with those of other investors’ and used to buy international currency at wholesale rates. Your shares will be exposed to the vagaries of international exchange rates, and this can be a nerve-wrackingly unpredictable way to invest abroad.

More and more people are choosing to buy property abroad – whether as future dream retirement home or as profit making venture. In Eastern Europe and the Middle East you can pick up property for remarkably low prices – developments and agencies advertise in the property sections of newspapers, and websites abound. While this could prove a sound long-term way of investing, there are numerous things to take into account – the stability of a country’s economy, complicated legal agreements and the cost of travel to and from the property are major factors.

Different countries operate wildly different property law, and you will need to get sound advice on all the implications before buying abroad. Check things like inheritance law – for example, in France, there are obstacles to simply leaving property to named recipients in your will. If you do buy abroad, you will probably find it useful to open a multi-currency account.

Internet Banking - Which Web Bank is Right For You

Finding information online seems like the proverbial search for the needle in the haystack – with so many sites and adverts vying for attention just thinking about searching for an internet bank is enough to bring on a headache. However, it might well be worth the effort – out of the five best-paying current accounts today, four are provided by internet banks. With a difference of two or three percent, the benefits could be substantial. Enter ‘online banking’ into your search browser, and you’ll pull up several independent sites comparing different banks and accounts. While the special offers can change day to day, there are a few banks that have been performing consistently well – the big three being Cahoot, Egg and Smile. Cahoot is the online arm of Abbey National, and the Co-operative Group runs Smile, but both currently offer better deals than their high street counterparts. Intelligent Finance is also a contender. Shop around to find what suits you best – whether it’s a low rate loan or a high performance current account, the right choice will depend on your individual needs and situation. Take into account things like customer service as well as the terms offered – it’s important that you can contact your bank easily when you need to, and that dealings with them are not an unpleasant ordeal. Even if you conduct most of your business online, there are still likely to be occasions when you need to speak to a human being, and friendly, well-informed staff can make a vast difference to your banking experience. First Direct is now planning to introduce a ‘virtual’ bank clerk to make online banking more customer friendly. Ease of use is another factor – a bank with a website that is easy to navigate will help you plan your finances with the least amount of hassle. Online banking has now come a long way from the days you could only view your account online – you can now pay bills, set up direct debits and transfer money between accounts at the click of your mouse. Egg have recently introduced a service called ‘Egg Pay’ that lets you securely send money to friends and family via email, and in future we can expect ‘account aggregation’ – an overview of all your financial dealings on one web site that will help make your transactions more efficient. . ‘Moneywise’ and ‘Which’ magazines are good sources of information to compare banks with – check out their websites.

Savings Code Tracker

The "Savings Code Tracker" savings learning SOFTWARE is FREE to download and use that will help you teach your children about how to save their money and make their savings grow. It is fun to use and very helpful at learning a little more than the basics of saving your money. Your children will quickly learn how to use this savings software so they can learn how to develope the best savings account plan for their financial future. I had this Savings Code Tracker software program specifically built for you to help your children learn how to manage their savings, because you and I know how important is to help your kids learn how to be wise with their money and have the best savings account. The Savings Code Tracker is easy to use that will help you teach your kids about financial savings. And to learn how to make their money grow, and also be wise and careful about spending it. By taking the time to teach your children about making the best choices possible with their money will also start a great communication process that will help you grow closer to your children as they gain knowledge and confidence towards building the best savings plan they can. The Free Software has a video tutorial that shows all it's functions and how to quickly and easily use it. Your kids will be up and running the software in no time. Have fun.

Do you have good posture?

When I started saving, I wasn’t saving much. However, I developed an important habit. Whether you’ve wisely saved money or received a good tax return, don’t go out and blow it on more stuff. You can have anything you want, you just can’t have everything you want. A.F. Bannerman once shared wise advice worth mentioning here that I’ve come to agree with and respect:

“Your savings affect the way you stand, the way you walk, the tone of your voice. In short, your physical well being and self confidence. A person without savings is always running. You must take the first job offer. You sit nervously on life’s chairs because any of life’s emergencies throws you into the hands of others. Without savings, a person is often fearful of the present and the future. Being in a state of constant fear is a horrible place to live. A person with savings can walk tall. You can appraise opportunities in a relaxed way, have time for judicious estimates and decisions. You need not be rushed by life’s problems or economic necessity. The person with savings can resign from his work if his principles tell him this is not the place to be. "

The person who is always worried about rent, food, bills, etc. can’t concentrate on long-range career goals. The person with savings can focus on family and service to shape personality and develop character.

2 practical tips to get started:
Track everything you spend. When you keep a log of everything you spend (gum, gas, latte, groceries, everything), you can’t help but see patterns in your spending. You’ll think twice before buying that next Starbucks. If you live on a budget for every category of expenses you have, you’ll be amazed at the control you gain over spending.

Savings is actually delayed spending. I didn’t understand the expression “pay yourself first,” until my mid-30s. It means you should set aside a portion of everything you make, save it, then invest it. You should do this regardless of whether or not you have your own business (hopefully you do).

Children's Bank Accounts - Planning Your Family's Future

Everybody wants to give their children the best possible start in life, and make their future as secure as possible. Two ways of helping them, money-wise, are by encouraging them to save with their own bank account, and by making investments on their behalf.

Children’s Accounts

Most high street banks offer children’s accounts, usually a straightforward bank account with a moderate interest rate. These often come with incentives like free piggy banks that are intended to help children develop a sense of responsibility and prudence about money from an early age. You may like to give your child a financial education by opening them their ‘own’ account – though there’s nothing to stop you using a normal adult account with better rates of interest.

National Savings

The Children’s Bonus Bonds are a tax-free savings account specifically aimed at children. You can invest between £25 and £3000 a year for five years and get guaranteed interest, plus a bonus. Many people choose to give Premium Bonds as gifts for children’s birthdays. If they win, it could give them the best present ever!

Child Trust Bonds

The government have introduced a special scheme to give children a savings account from the very beginning. Any child born after 1st September 2002 is entitled to a voucher worth £250 to be invested in a savings account. Visit www.childtrustfund.gov.uk for details.

It’s a good idea to invest for your children’s’ education as early as possible – whether that means private school fees or supporting them when they go into higher education. Long term investments, such as bonds with a ten year term, are a good choice for this purpose.

Children are taxed in the same way as adults, and have their own personal tax allowances. If you give money or assets to your own child and it produces an income of £100 or over, the income is counted as yours and taxed at your top rate. You can avoid this rule by choosing investments with tax free returns or capital gains, rather than income.

If people other than parents give gifts then the income counts as the child’s own, and in this case it’s a good idea to ask grandparents or relatives to send a letter or card with any money gifts. That way you have proof of whom the money came from in case the tax office demands it. For a detailed explanation of children’s tax issues, look up the Inland Revenue’s website at www.hmrc.gov.uk

Child Trust Funds – Take a Long Term View

Andrew Hagger Head of News and Press at Moneyfacts.co.uk looks at the performance of Child Trust Funds, one year on.

April 6 2006 marked the first birthday for the Child Trust Fund (CTF), and there are undoubtedly some mums and dads out there who are feeling pretty smug with the performance of the investment that they have chosen.

One year on from launch, those who have opted for one of the riskier options will have seen their initial £250 deposit grow to over £370 if they had opted for the F & C Global Smaller Companies investment trust. This level of growth dwarfs the returns for cash based investments where parents will have seen their £250 become approximately £262 during the last 12 months.

Although the cash return may seem small beer when compared with the dramatic increases seen in some of the equity based CTFs, the situation could have been worse, i.e. they could have been one of the half a million parents who have failed to use their voucher to open an account, thus depriving their siblings of any return whatsoever.

For those who have failed to open an account, it is worth remembering that Gordon Brown confirmed in his recent budget that the Government would contribute a further £250 (up to £500 in some cases) to your chosen fund on your child’s seventh birthday.

Both Abbey and Nationwide BS report that over 60% of CTFs opened have been cash based; however when parents see the types of return that have been made in some of the non-stakeholder equity based funds, they may be tempted to switch.

However a word of caution before anyone hastily decides to make the move. The funds that offer the potential for greater returns are also those that in more turbulent times are the funds that could lose the most money, so don’t be blinded by just one year’s performance, think of the CTF for what they are – a long term savings and investment account.

There is a middle ground that falls somewhere between the cash and investment trust CTFs, namely stakeholder equity based funds that will offer potential of higher returns than cash CTF, but less risky than the non-stakeholder investment trusts.

If you are in doubt about what is the best option for your child’s savings, time spent now discussing with an independent financial adviser could prove to have been a worthwhile exercise when your son or daughter gains access to their nest egg on their 18th birthday.

How to Have Financial Peace

Copyright 2006 Emma Snow One of the biggest contributors toward personal peace is financial peace. Sometimes it is assumed that financial peace is only for those with endless amounts of money. In actuality, you can be financially secure at almost any income level. Avoiding common financial mistakes is the first step. This article discusses some mistakes that many of us make and how to avoid them. I'm Too Young to Settle Down Not investing in a home or buying one too late in life is a mistake that more and more people are making. The reason it is a financial mistake is illustrated in the following example. Let's say Brittany makes $60,000 a year, is single and rents a home for $2000 dollars a month. When tax time comes, she has little or nothing in the way of deductions. In 2005 she would have had to pay $11,665 in federal taxes alone. If she had put that same rent payment toward a mortgage payment instead and purchased a $315,000 home with a 30 year fixed rate of 6.5%, her mortgage interest deduction would have been $20,236, saving her $5,059 in taxes in 2005. Tax savings isn't the only reason to buy a home. Another reason is the investment it represents. Let's say Brittany did buy a $315,000 home in January of 2005 and its value increased 5% in one year. The 5% increase in value would give her $15,750 in equity by 2006 and she would have paid $3,657 toward principle as well. Let's add it up. Rent money saved, $24,000 + taxes saved, $5,059 + equity earned, $15,750 + principle purchased, $3,657 - interest paid, $20,236 = $28,230, or $2,352 per month saved by purchasing a home. Even if she put $1,000 into that home each month in the way of maintenance, she still would have saved over $1,300 per month in 2005 by buying a home. But It Was On Sale! Accumulating debt instead of savings is the next financial error to avoid. Unless debt can almost guarantee you a future return, such as investing in a business, education or your home, it is best to avoid altogether. Even purchasing automobiles with cash is better financially in the long run. As an example, let's look at a household that has a credit card balance of $10,000. Assuming a 15% interest rate, if they pay $150.00 per month on the card and don't put anything else on it, their total interest and principle paid to that card is $21,635 before it gets paid off. It will take them over 12 years to pay it off at this rate. They are paying $80 in interest a month for the "privilege" of having credit card debt. There is even more to the debt picture, however. Debt is not just one sided, there are opportunity costs associated with debt. If they weren't putting $150 a month toward their credit card, they could instead be putting it into a savings account. Putting $150 a month into a savings account with a 4% rate of return compounded monthly for 12 years would grow to almost $28,000, which is $21,600 in principle and $6,400 in interest earned. So now the real cost of a credit card is the interest paid, $11,635 + the foregone interest from the savings account, $6,400 = $18,035 in 12 years or $125 per month of lost money. Do You Accept VISA for my Mortgage Payment? Not having any liquid savings is another area that can end up hurting you financially. The minimum amount to be saved is 3-6 months of living expenses. This will help to cover loss of income or medical emergencies that may arise. This money should only be tapped for major emergencies and not for things like vacations or weddings, which should be saved for in other accounts once the liquid savings has been established. When no short-term savings is available, the risk of bankruptcy increases. With the new bankruptcy laws it is becoming increasingly difficult to erase debt. Liquid savings is especially important when you have a large income that is not standard across the industry, or when there is not a high demand for the type of work you do. In these situations, finding a new job with the same income may be difficult. This can leave you vulnerable to rushed decisions that can damage you financially for years to come. As an example, I have a friend who had made good money at a software company for 20 years. His income was quite high because he had been with the company for a long time. The company was eventually purchased and he was laid off. He and his family had just finished building and furnishing their dream home when it happened. While they didn't have massive amounts of debt, they didn't have any liquid savings either. In order to get out from under their house payment, they sold their home for much less than it was worth, they also emptied their 401(k) and both had to take low paying jobs just to make ends meet. Now, eight years later, they are just starting to crawl out from under it all, but without their dream home or a retirement account. Natural Disaster...Here? Little or no insurance is a mistake that many people make hoping they won't be hit by a natural disaster. Insurance is your best defense against financial ruin in such a situation. Sitting down and talking with an insurance agent is the first step. Make sure that the policy covers those things you are worried about. Set aside the money needed for the deductible on the policy if a disaster does occur. Other things to prepare for in a disaster is the possibility of being out of work for several weeks or months, high medical bills or being left without an automobile if it is also destroyed in the disaster. Liquid savings is the answer to these problems. Remember, just because the home or vehicle no longer exist doesn't mean that their payments have gone away. I Have Plenty of Time to Save Not saving for retirement is a mistake that is made all too often. If you do save, there is a good possibility it is not enough to retire on. The findings of the 2006 Retirement Confidence Survey put out by the Employee Benefit Research Institute suggested that many American workers are not prepared for retirement and will have to work far longer than they expect. As an example let's look at Jane who is 55 years old and currently makes $60,000. She hopes to retire at age 65 and has already put away $250,000. By the time she retires, her home will be paid for and she assumes she can live off 70% of her current income or $42,000. If she lives to 90, she will need to have income for 25 years. Let's assume her $250,000 grows at a rate of 7% until retirement and 6% once she starts taking the money out. We need to also account for inflation which averages about 3% per year. In order to have $42,000 per year for 25 years she will need $1,151,243 in her retirement account by age 65. That means she will have to start contributing $58,919 per year for the next 10 years to reach this goal. Obviously that isn't going to be possible. What is possible is for her to push back retirement to age 75 and save about $10,000 per year until then. Her goal retirement age of 65 is not going to be a possibility. This is a start on the road to financial peace, steering clear of financial mistakes. Learning more about the different ways investment mistakes can hurt you in the long run is the first step in avoiding future problems. Next is to not make or stop making those mistakes. It may take some time to change your habits and actions, but it will pay well in the long run if you do.

Banking Online Has A Great Deal Of Advantages.

Online banking is one of the newest internet fad, with millions of users flocking to their personal computers to pay their bills online. With a variety of advantages, such as convenience and simplicity, it is no wonder that so many are enthralled by this current trend.

To pay bills through a virtual banking system, you need a personal computer, access to the world wide web, and in some occasions, software provided by your local bank. A broad percentage of the larger banks now offer completely functional internet banking free of charge, or for a small fee. The more progressive banking websites even give you the opportunity to view your different credit card accounts, inspect your brokerage accounts, and get stock quotes for free.

Small banks will allow you to see your account balance and history, but you will not be able to make payments. Making transactions and paying bills online can be virtually effortless. To begin, you will need to create an address book on your computer that lists all of the the companies that you will be paying. When you receive a virtual statement, select a payment amount and the date that you would like it to be paid.

Then, click; the rest is up to your bank. It is that simple. A positive aspect for most people is that a majority of payment programs will allow you to schedule to pay your bill in advance, according to the billing cycle. What does this mean for you? No more late payment charges!Banking online has a great deal of advantages. For one, banking websites are open 24 hours a day, seven days a week; they never close! Also, you have access to your banking account from anywhere in the world.

All you have to do is find a computer, the web, and click...you are banking. You never have to worry about security. You can be assured that online banking websites are furnished with secure servers. And almost any banking site can perform a transaction faster than your average ATM.

Virtual banking websites now allow you to manage a variety of your accounts such as securities and IRAs.With the advantages come the disadvantages. If you are not familiar with the internet or personal computer, navigating a banking website may be tricky at first. You must tutor yourself, and learn all of the basic aspects of the online banking system.

Another unsatisfactory detail is the time it takes to actually get your online banking account set up. You must first go to your local branch and supply identification and complete forms. Once this is completed, you are given a user id and password for the actual website. Then, you are finally ready to begin your adventure in the online banking world.

Internet Banking – The Pros And Cons

Only a few years ago the concept of online banking seemed like a dubious one – concerns about security and computer glitches were enough to put most people off. But with the continuing success of flagship companies like Cahoot, Egg and Smile, more and more of us are choosing to do business over the net. Sophisticated technology means that your information is well protected, and an online account offers several advantages over traditional banking.


Anytime, anywhere

The convenience of being able to log on and carry out transactions at any hour of the day or night could be a welcome alternative to visiting the bank on your lunch hour. No queues and no bank holidays mean the customer has even more control over their finances. Plus, your account information is displayed as a clear overview – no more riffling through mountains of old bank statements to find the info you’re looking for.

Get higher

Because online banks don’t have the overheads of running branches, they can pass on the savings to the customer, and offer better rates of interest on your money. Not only do they offer substantially more interest on your current account but there are also loans available with very low APRs that will save you money in the long run.

Safe and secure

Some experts consider internet banking to be even more secure than traditional methods – you won’t have pieces of paper with sensitive information lying around, and there’s no danger of your business being overheard by other bank customers. Check that the site is secure whenever conducting business online, never send passwords or account information in emails, and be sure to log out when you’ve finished your session

The downside?

In the past there have been a few cases of computer glitches revealing customers’ personal information, but these have been relatively minor and as internet banking becomes more popular, systems are likely to become more secure than ever. Technophobes probably won’t enjoy banking online. You do need to make sure your computer’s security system is sound, and that you have privacy for your session. Some people may miss the face-to-face contact of their local branch, and most will choose a combination of online banking, phone banking and branch visits. As internet banking becomes more established, it’s likely most of us will end up conducting at least a proportion of our business online, and you could find switching on to the new banks well worthwhile.

Savings Accounts - Professional Advice

When it comes to savings, you may well find yourself daunted by the sheer variety of ways to invest your money. Particularly if you find yourself with a substantial amount to invest, and are less than confident at dealing with things like the stock market, bonds and trusts, you’re likely to gain from professional expertise. The main issue here is trust – you want to be sure your money is being used to its full potential and whoever you entrust it to must be someone you have total confidence in. If you have a basic understanding of how savings and investments work, however, it will be a lot easier to make judgements about the reliability and efficiency of individual advisers. Independent Financial Advisers Usually you will not be charged for general advice, but the adviser will gain commission when he or she sells you particular products. Don’t be afraid to ask about commissions – a good adviser should be open and transparent about such matters. They are duty bound to find out all relevant information about you and then give ‘best advice’ – which means selling you the products that are most suitable for your situation. Accountants Accountants normally advise on book keeping and tax, but sometimes also give advice about investments. If involved with investing, they must belong to one of the Recognised Professional Bodies responsible for regulating their business. These include the Institute of Chartered Accountants and the Association of Chartered Certified Accountants. Stockbrokers If you are dealing on the stock market, you will need to buy and sell your shares through a broker. If you want advice on your investments, choose a traditional stockbroker. On the other hand, there are brokers that offer a dealing-only service, and this is a cheaper way to buy and sell shares. Stockbrokers charge a commission on deals, and a traditional brokers service should include advice. www.londonstockexchange.com provides detailed advice and ways to locate a broker. The Financial Services Authority regulates all these professionals – if you are unsure about the credentials or dealings of someone check with them to verify that they are legitimate and are operating fairly. The FSA website also has details of what to do if you are unhappy with the service you’ve received from a finance professional – check www.fsa.gov.uk. Once again, the government’s advice site has sound information on the basic principles – and links to other information sites. www.direct.gov.uk

Personal Accounts – Choosing Your Bank

While many people are with their bank because they’re used to them or because it seems like an unwanted hassle to change accounts, there can be benefits to shopping around. And just because you keep your main account in one bank, there’s no need to keep all your accounts or credit cards with one firm. If you have a poor credit rating or a large overdraft, you may find it harder to change banks, but some banks will ‘buy’ your overdraft from you, or offer to convert it into a loan. For a small fee you can request details of your credit rating from Equifax or Experian – the two leading credit reference agencies. Convenience Depending on your circumstances, you may find you’d be better off with one of the new internet banks, like Smile or Cahoot. These can give better interest rates, because they have lower overheads than high street banks that have to run branches in ‘real time’. On the other hand, you may rather stick with a large bank you know and trust – perhaps you have a good relationship with your branch manager and can expect extra support when you need it. The larger banks also have plentiful local branches, which could be a plus point if you need to, say, pay in cheques frequently. Terms While interest rates are an important consideration, there are other factors to take into account when choosing a bank, such as bank charges. Some banks will charge more than others, for example, if you exceed your overdraft limit or if a cheque bounces. Others will charge extra to provide you with copies of statements. Check that the bank complies with the Banking Code, a UK body that promotes best practise in the financial sector. Bear in mind too, that some banks will offer excellent terms for new customers in order to attract your business, so it may be worthwhile swapping just to take advantage of these. You may find a lower-interest loan, for example, with a new bank. Bank policy and corporate ethos Some institutions offer ‘ethical’ banking, so that you can be sure your money is not being used to fund companies who do not conform to certain criteria. The Co-operative Bank led the way in ethical banking, but there are other banks and investment companies to choose from. As well as the larger high street banks, there are smaller banks, building societies and friendly societies to consider. While normally associated with savings, some offer current accounts with attractive rates, and many of the new building societies are in fact indistinguishable from banks.

How Senior Citizens Can Simplify and Organize Their Finances

Everyone can use some help getting their financial affairs in order, but especially senior citizens who may face special challenges and decisions involving money management later in life Simplify your life: Have your Social Security benefits, pension payments and other income automatically deposited into your bank account each month. Direct deposits are safe, reliable and convenient. Also arrange with your bank to automatically pay your mortgage, utility bills, insurance premiums and other recurring charges. Doing so takes the hassle out of making scheduled payments and helps avoid late charges or service interruptions. You can also have automatic withdrawals from your bank account to routinely put a certain amount of money into a savings account, a certificate of deposit (CD), a mutual fund or a U.S. Savings Bond. Telephone banking allows you to use your touch-tone phone to confirm that checks or deposits have cleared, get your latest balance or transfer money between different accounts at the same bank. And if you own a home computer, consider banking and bill paying quickly and easily over the Internet, 24 hours a day, seven days a week. Internet banking and bill paying is usually free of charge or it costs less than what you'd spend on postage. Also consider opening a "cash management account" that combines cash, stocks and other assets into one account with check-writing and credit card services. These accounts usually involve an annual maintenance fee. Update your will and other legal documents: Who will inherit your savings accounts and other property when you die? Who else should have access to checking accounts to pay bills if you're hospitalized? What kind of medical treatments do you want to receive — or avoid —if you become critically ill? These are the kinds of questions you should be asking yourself, preferably in consultation with family members and your lawyer or other experts. Your answers to these questions may require actions involving important legal documents and how you set up various bank accounts. Some matters may be handled as part of your will. Others may involve having or updating a "durable power of attorney" (authorizing someone to handle your finances, property or other personal matters if you become mentally or physically incapacitated), a "living will" (instructions about future medical care if you become ill and are unable to communicate your wishes) or a "health care power of attorney" (designating a family member to make decisions about medical treatment). Having these health-related directives can prevent unwanted and potentially costly medical procedures. You may want to hire an attorney specializing in elder law or "estate planning" (how money and property and other assets can go to your heirs with a minimum of costs, taxes and hassles). Organize and protect your important documents: Make sure your bank and brokerage statements, insurance policies, Social Security and company pension records, and other personal and financial papers are in a safe place and easy to get to. As the victims of recent hurricanes, floods and other disasters have learned, it's wise to take extra precautions with essential records. For the most important original documents, such as wills, passports and birth certificates, seal them in airtight and waterproof containers to prevent water damage. Make backup copies and consider giving duplicates to loved ones —or at least let them know where to find your records in an emergency. Consider renting a safe deposit box at your bank for certain papers that could be difficult or impossible to replace, such as birth certificates and originals of important contracts. Don't put into a safe deposit box anything you might need in an emergency, such as your passport or medical-care directives, in case your bank is closed for the night or weekend. Also, many experts generally advise against putting a will in a safe deposit box because, in many states, there may be complications accessing the will after the person dies. And remember that copies of wills aren't valid. Perhaps the best approach is to ask your attorney for guidance. For the most important papers you keep at home, consider an inexpensive but durable home safe. Toss old documents: Are you afraid to throw away old bank statements, bills, receipts and cancelled checks because you think you may need them some day? We can't tell you when it's safe to throw away certain financial documents —that's for you to decide, perhaps after consulting with your accountant or attorney. For example, cancelled checks with no long-term significance for tax or other purposes probably can be destroyed after about a year. Cancelled checks that support your tax returns (such as charitable contributions, investments, home improvement costs or tax payments) should be held for at least seven years and in some cases indefinitely. Also, to avoid becoming a victim of identity theft, shred any document that contains a Social Security number, bank account number or other personal or financial information. A crosscut shredder that turns paper into confetti is highly recommended by experts. Take precautions with old accounts. For the benefit of your heirs, either dispose of proof of old bank and brokerage accounts, life insurance policies and other assets you no longer own (again, assuming you don't need the documents for tax or other purposes) or clearly mark them as being sold or cashed in. Otherwise, loved ones who discover the information after your death could waste a lot of time and effort researching these mystery accounts when there is no money or property to be claimed. On the other hand, people do lose or forget about money or property. It's easier than you think. For example, you may move and fail to give a forwarding address to a bank where you have a small savings account. Or, you may change your name and not notify your banks or other companies. That's why it's important to keep records of your finances, note which accounts have been closed or cashed in, and make sure your financial institutions and others who owe you money have your current address. In most cases, after a certain number of years of being "unclaimed," assets are transferred to the state government, where they still can be claimed by the rightful owners. You also can begin a search for assets of any sort that have been sent to a state by going to the Web site of the National Association of Unclaimed Property Administrators. And one final warning: Beware of frauds involving companies offering to "find" your unclaimed property. There are reputable companies that, for a fee based on actual recoveries, will help people who don't want to take the time to research unclaimed property or whose cases may be unusually complex. But some companies may charge fees up-front based on misleading claims or for services you could easily perform on your own.

3 Ways To Get Your Free Annual Credit Report

Yes, you can now get your credit report without paying a dime. And unlike before, now it is truly free. No longer do you have to sign up for a "free" credit report by signing up for "credit monitoring protection service" for a low annual fee of $79 a year! The days of dodging the annoying charges and service fees for a free credit report are over.

Under the 2003 Fair and Accurate Credit Transactions Act, you have the right to a free copy of your credit report within a 12 month period from the big three credit report bureaus (Experian, Equifax and TransUnion).

The goal of this new government act is to ensure that Americans have the right to stay informed about what these three credit reporting bureaus say about you without having to pay for it. Since identity theft, fraud and errors are quite common today, why should you have to pay for a copy of a report to fight back against these problems?

Here are the 3 ways to get your free annual credit report:

The three credit reporting agencies have created a website to request your annual credit report.

1) Go to www.annualcreditreport.com

2) Call (877) 322-8228 to request your free credit report.

3) Complete a form from the Federal Trade Comission, http://www.ftc.gov/bcp/conline/include/requestformfinal.pdf and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

If you go directly to the three agencies or use any other type of service you may end up having to pay or sign up for the subscription services I mentioned above! Make sure you use one of the 3 methods I have listed to get your annual free credit report.

You can get the reports from all 3 agencies at once or stagger the reports from each one during the course of 1 year. The advantage of staggering the reports that you receive is to keep track of how any major changes in your financial picture affect what is on your credit report. For example, if you plan on getting a second mortgage over the coming year, or applying for student loans, ect. it might be wise to get a report before and after these major events!

This new Act does not supplant the other methods you can take advantage of to receive a free credit report. If you are applying for unemployment or been denied a loan, or need a credit report in order to get a job, you still have the right to obtain a free credit report.

Take advantage of this new government regulation and make sure all of the information listed by all three credit reporting agencies are correct. Any errors or omissions can reduce your credit score and end up costing you a lot of money when you apply for any type of credit.

Helping Your Money Last... After Your Last Paycheck

A look at different ways to afford retirement Today's seniors can expect a longer retirement than their parents. That means more years to finally do what you want to do, including travel and hobbies (not to mention spoiling the grandkids). But a longer retirement also means more years of money going out and no paycheck (or only a small one) coming in. That's why seniors need to be smart about how they pay for their retirement years. "You really need to have a strategy to make sure your savings last," said Lee Bowman, National Coordinator of Community Affairs at the FDIC. To help you set or adjust your own plans for affording retirement, FDIC Consumer News offers this look at some different sources of money, including some potential pitfalls to avoid. But first, remember that this is general guidance only. Your own need for retirement money will depend on factors such as your health-care costs or whether you plan to earn part-time income. As with any major financial decision, be sure to consult with financial advisors and loved ones to decide what strategies are best for you. Social Security and Pension Benefits: Your first order of business: Determine when the best time is to start tapping this money. For example, if you start receiving your Social Security benefits before your "full" retirement age (which could be anywhere from 65 to 67 under current laws), your benefits will be reduced permanently, and perhaps significantly, from what they would be at your full retirement age. And if you receive Social Security benefits early, but you continue to work and your earnings exceed certain limits, your benefits will be reduced even more until you reach full retirement age. On the other hand, if you delay collecting Social Security until after your full retirement age, you can continue to work and still get your full retirement benefits, or even higher benefits, no matter how much you earn. Here's basic guidance from the Social Security Administration (SSA): "As a general rule, early retirement will give you about the same total Social Security benefits over your lifetime, but in smaller amounts to take into account the longer period you will receive them. There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit is permanently reduced." Employer pension plans usually have options somewhat similar to those of Social Security. Contact your employer's personnel department for guidance. No matter when you decide to start receiving your benefits, remember that it could take several weeks to receive your first payment. Also consider having your payments deposited directly into your bank account so you don't have to worry about a check getting lost or stolen in the mail. IRAs, 401(k)s and Other Retirement Savings Plans: As with your Social Security and pension benefits, you may want to delay tapping into your retirement accounts as long as possible so they can continue to grow to cover unexpected medical costs in the future or to protect the inheritance for your heirs. However, if you need to supplement your income, Individual Retirement Accounts (IRA) and other retirement savings can be a good source. Before you start withdrawing money from your retirement accounts, most financial planners suggest setting a target annual withdrawal rate. Make it low enough to avoid depleting these funds too quickly. You can fine tune your withdrawal strategy each year, preferably with the guidance of your financial or tax advisor. For example, if your personal situation changes, you can adjust how much you should withdraw. Also review your retirement portfolio — your mix among stocks, stock mutual funds, CDs (certificates of deposit), bonds and so on — to be sure it's well-diversified. Another caveat: If you have retired, every year after age 70 ½ be sure to take out at least the minimum required distribution from your tax-deferred retirement savings plans (except Roth IRAs) to avoid large IRS tax penalties. (If you are still working at 70 ½ or later, you do not need to start taking minimum distributions from your employer's plan until April 1 of the year following the year you finally retire.) "Remember, you only have to withdraw the money, you don't have to spend it," said Heather Gratton, an FDIC Senior Financial Analyst. "If you don't need the money you can reinvest it somewhere else, such as in a bank savings account." She added that, because each person's situation is different, it's best to discuss your strategy with your tax or other advisor.