Monday Morning Quarter-Buck
Weekly Focus – Think About It
"It ain't about how hard you can hit. It's about how hard you can get hit, and how much you can take, and keep moving forward." – Rocky Balboa
As a reminder, a couple of Tuesday's ago, I had the distinct pleasure and opportunity to speak to a wonderful group of women via the Corning Area Woman's Club. This club was organized in 1918 and is the oldest women's organization in the Corning area. They are currently looking for members, so if this sounds like a group you would be interested in check out their Facebook page:https://www.facebook.com/CorningAreaWomansClub/?hc_ref=SEARCH
The topic I delivered was called, "10 Financial Tips in 30 minutes." I delivered tips 1 - 5 last week and here are the remaining 5:
Tip #6 - Review Your Insurances
Often this area of finance is overlooked. Insurance is not a one and done decision. Life changes and needs for insurance increase and decrease.
I recommend having a brief conversation annually with your home, auto and umbrella insurance agent; and every three years, have them make sure you have the best policy for the cost. Perhaps your financial life has improved and you don't have enough liability coverage - talking to your agent about this can help you transfer the risk from your shoulders. Pay VERY close attention to those exclusion riders and any new exclusion riders. If you don't remember seeing them, then ask for them specifically.
If you are still working, make sure you review your disability insurance at least once a year; understand the coverage amounts and coordination - more is not always better. Understand if it is a taxable benefit, or possibly (if you are paying for it) a tax-free benefit. What triggers it? How long will it last?
Life Insurance is one of those that people often ask about - do I need it and if so, how much. That is too difficult to answer in general terms, but think about what debts you owe, the role of your income (percentage to the household), what about educational costs, and the cost of your final wishes. I recommend reviewing this annually as well.
Health Insurance is ever changing. If you are still working, your employer may offer several different types of plans for you to select from - running the numbers on which plan is better for you each year is really critical and can save you (and your employer) hundreds of dollars. The same is true for those on Medicare; plans change each year, especially the prescription formularies. You should be considering any surgery you might need and what the out of pocket costs would be; as well as what prescriptions you are taking.
Long-Term Care Insurance is a whole separate blog, but many that already have an older policy are seeing the premium cost increase as much as 50%. There is a "sweet" spot for carrying long-term care insurance, so this too is something that should be reviewed each year.
Tip #7 - Understand Medical Coverage Options
What questions should you be asking about your medical coverage?
For employer sponsored plans there are often a number of questions:
What is the difference between PPO, HMO and HDP; what do the initials provided even mean?
What is an HSA or an FSA? Who can use which, what is the maximum amount that can be contributed?
What do these plans cost? What's the coverage?
What is a copay or coinsurance?
For those that are Medicare Eligible
What's the difference between Parts A, B, C, D and supplemental?
Should you go with traditional medicare and add a supplemental policy?
Should you go with a medicare advantage plan (part c)?
What are the premium costs?
What is the coverage?
What are the co-pays and or co-insurance amounts?
What prescription plan should I select?
Tip #8 - Create an Emergency Fund
Everyone (yes, everyone) should have some money designated as "emergency funds." This is money they can easily get to if a large expense hits them (such as car trouble, a major appliance failure, etc).
Some may say, well I can just put that on a credit card, which is true for the short term, but you should have the ability to pay that credit card off when the bill comes.
I recommend putting it "out-of-sight" in a savings account you don't often look at, unless you are disciplined enough to know that some of the money in your checking account is really not for monthly use.
I also recommend that parents do this with their kids by putting a portion of their allowance in an emergency fund.
Tip #9 - Review Your Estate Plan
I often ask when the last time your Will, Trust, Power-of-Attorney, and Health Care Proxy was updated. If it is beyond three years, I strongly recommend a review of each of those documents.
Are the beneficiaries of your Will and Trust still applicable?
Are the representatives you select still able to act on your behalf?
Have the laws changed and one of the documents should be updated to reflect new language?
Tip #10 - Review Your Portfolio
I don't believe in day trading - in fact, I encourage people not to look at their account daily, it only causes anxiety. However, I do recommend a review at least annually, preferably semi-annually.
Do you have good asset allocation?
Do you have good asset diversification?
Are you clear on the risk of the portfolio?
Does the above match your goals?
Wishing you a wonderful week!
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