YOUR FISCAL FITNESS
TAX TIME FINANCIAL adjustments
Financial security should be among your top concerns. However, how much do
you know about your financial planning needs? Our quiz will help you find out.
Do you know how much of your income, should be invested each year
for long-term goals?
Answer: There is no simple rule of thumb regarding
this question. Work with a financial planner to establish a goal. Then you can
set a correct amount to meet the goal.
Do you take full advantage of tax-deferred investments, such as IRA's
and Keogh accounts?
Answer: Use all the tax-deferred investments
available to you. If you are not eligible for a 401(k), set up a simplified employee
pension (SEP-IRA), which will allow you to put away 13.024 percent of your net
annual income in a tax-sheltered account. If you want to save more, a Keogh will
allow more options. Profit sharing plans lets you contribute up to 15%. Further,
another form of Keogh, the money purchase plan allows you to put an additional
Do you have an emergency fund to avoid dipping into your investments?
Answer: Financial planners recommend that you
have enough cash available to cover three months of expenses in case of emergency.
Do you pay off your credit card bills each month to avoid paying high
Answer: If you overextend yourself on credit cards, it can be
difficult to pay them off. Try not to purchase anything without giving it thought
as to whether it is worth the cost plus the high interest.
Do you balance your investments among stocks, bonds, real estate,
and money market funds?
Answer: A rule of thumb suggests that the percentage of assets
in bond type investments should equal your age. Real Estate is a growth asset!
Do you consult a financial planner when a major event such as a new
child changes your financial picture?
Answer: Personal objectives drive financial
planning. Re-evaluate, should these change.
Do you know how much of your investment portfolio should be in stocks?
Answer: Only long-term investment dollars should
be in stocks and stock mutual funds.
Do you know how to apportion your assets among savings, investments,
and life insurance?
Answer: Risk management, such as life insurance
always comes first.
SCORING: Add the number of yes answers. If yours total 6-8,
you are in great shape! 3-5, you may need a more strenuous fitness program. 0-2,
call a financial planner soon.
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Information provided by this website is general and is not a substitute for professional
advice. Please consult your investment advisor and/or attorney before entering
into any transaction.