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Are You Falling for These Financial Tricks?

Carrie Schwab-Pomerantz on

Saving on premiums may seem smart now, but what's the ultimate cost if you don't have enough insurance when you need it? On the other hand, if you're paying for insurance you don't need, you're also losing out.

Treat: Check to make sure your coverage and plans for medical, auto, homeowners/rental or disability insurance are still right for you. Be sure to take full advantage of all your employee benefits. And don't be lured into buying unnecessary insurance for risks that you can handle more cost-effectively on your own (for example, pet insurance with lots of exclusions and high deductibles).

8) Trick: Confusing saving and investing

Just because you have money in a 401(k) doesn't mean it's invested. You have to take action to make your money grow.

Treat: Long-term investing in the stock market is one of the best ways to grow your savings. The key is to invest in a diversified mix of stocks, bonds and cash that are appropriate for your time frame and feelings about risk -- and never try to time the market or bet on a single stock. A 401(k) that offers target date retirement funds is one easy way to get started.

9) Trick: Taking Social Security too early

You can file for Social Security as early as age 62, but that doesn't mean it's the best choice for you. In fact, it could mean you'll collect considerably less over time.

Treat: Don't jump to collect Social Security benefits earlier than you have to. If you file before what the SSA considers your full retirement age, your benefits will be permanently reduced. And for every year you wait past your FRA until age 70, you'll get an 8% increase. That can make a huge difference, especially if you enjoy a long life.

 

10) Trick: Ignoring your estate plan

You may have an estate plan in place, but when was the last time you looked at it? And if you don't have one already, the trick could be not only on you but also on your heirs.

Treat: Set up at least a basic estate plan, including naming a guardian for any minor children and an advance health care directive. Once you have a plan in place, be sure to review and update it periodically to reflect any significant life changes such as marriage, divorce or additions to the family.

Unlike Halloween candy, these financial treats aren't just a one-time indulgence. They can set you up with a sweet financial situation to savor for years to come!

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Carrie Schwab-Pomerantz, Certified Financial Planner, is president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances After Fifty." Read more at http://schwab.com/book. You can email Carrie at askcarrie@schwab.com. The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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Copyright 2019 Creators Syndicate, Inc.
 

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