L ock in a F ail -S afe S avings P lan
for you. Work toward setting aside enough to cover at least three months’ expenses to avoid using high-interest credit cards.
AUTOMATE RETIREMENT SAVINGS. If possible, put 10%–15% of your paycheck into a retirement account, such as a 401(k), Roth IRA, SEP-IRA, or another investment account. To help you meet this lofty goal, take full advantage of any matching program your employer offers. That’s free money! OPEN A BROKERAGE ACCOUNT. A regular investment account gives you access to stocks, bonds, and other instruments. Most advisors recommend a low-cost index fund as an initial investment, but if you are uncomfortable with stock market volatility, consider certificates of deposit or bonds. If you hold investments for at least one year, your earnings will be taxed at the long-term capital gains rate — far less than the tax on your ordinary income. SET UP A HEALTH SAVINGS ACCOUNT. Health savings accounts (HSAs) are a powerful way to set aside income tax- free to pay medical bills. They offer a triple tax advantage in that deposits, earnings, and withdrawals are tax-free if you use withdrawals for eligible medical expenses. You can sign up for these plans through an employer or HealthCare.gov by opting for an HSA-eligible health insurance plan. To determine how much to deposit, search online for “HSA Contribution Calculator.” Unlike other tax-sheltered savings vehicles, HSAs do not have a “use-it-or-lose-it” requirement, so you can accumulate funds for the future.
Budgeting and saving are skills many Americans learn late in life, if at all. Only 36 states require high schools to offer personal finance courses. While that’s a marked increase from seven states in 2000, it still leaves many Americans adrift. Many consumers benefit from setting up regular automatic deposits to each of the four key savings and investment accounts, either through paycheck withholding or via their bank. With this system, growing their savings requires no conscious effort. START AN EMERGENCY FUND. Deposit 2% of your paycheck into an emergency fund, either a high- yield savings account or a money market fund. These accounts currently yield about 4% annual interest or more, so your money will be working
E ffective S trategies for S toring Y our W ill DON’T LEAVE IT TO CHANCE
Many people consider their will the most important part of their estate plan. Without a will, the laws and courts determine what happens to your assets after you pass, and if you have minor children, the courts will also decide who becomes their guardian. By establishing a will, you can choose what happens to your assets and name a guardian for your children if anything happens to you.
After creating a will, you have to determine where you will store it until it is needed. You don’t want to leave it out in the open, as family members may become upset upon discovering that they aren’t getting specific assets. However, you also don’t want to hide it in an impossible-to-find location, as it will be of no use to anyone if they can’t find it after you pass away.
Below, we offer three places you can store your will and ideas to consider before locking it up.
FILE YOUR WILL WITH THE PROBATE COURT. When you file your will with the probate court in your county, they’ll keep it in a secure vault until you withdraw it or they learn of your death. Be sure to inform your chosen executor and beneficiaries that your will is with the probate court so they don’t waste time looking for it elsewhere. KEEP IT IN A SAFE DEPOSIT BOX. Your safe deposit box at the bank or post office might seem like the perfect spot, but your executor and beneficiaries might be unable to access it when needed. A probate court can order a financial institution to deliver the documents to the court, but this can take additional time your family should spend grieving. LOCK YOUR WILL IN A DISASTER-PROOF SAFE AT HOME. This is a good way to keep your will safe and close to home. You’ll want to use a fireproof and waterproof safe to protect your will from any potential disasters. Be sure to let your executor know the will is in the safe and tell them how to access it.
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