More Than Finances

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Watch Out For These Common Retirement Plan Missteps

So a person has taken the first financial steps into making a future that when she or he finally leaves the office, that nest egg will make the retirement a good one. Now, it is time to make sure those first steps do not lead into a stumble that hurts your savings. Here are some pitfalls to look out for.

Insufficient Planning

Like in any other strategy, short-term planning or creating plans with little information make all other pitfalls look quaint. For example, does the individual know the differences between stocks and bonds? Have they made sure their portfolio is actually diversified or do they just have same type of stocks across different mutual funds? These are just some things to consider about as you prepare your retirement strategy.

Staying Still

It might not be in the nature of a retiree to make as many risks as he or she used to. However, if a person is not willing to adapt to the changes even at that late a stage then their retirement is already in danger. It is unwise to make an entire retirement plan hinge on outside factors like a perpetually stable market or no raises in healthcare costs. That way of thinking about will insure a bad hit on anyone’s retirement savings.  The best way to fight this is to be fluid in all aspects of retirement. A willingness to change strategies and a close eye on market shifts will hold savings in a safe position for it to grow.

No Portfolio Diversity

This is a pitfall that sadly many fall because of the dreaded fear of making a portfolio that has anything else than bonds. The word “stocks” bring thoughts of ruin, especially after the 2008 US market crash. However, stocks are a safer choice than most think. Historically, they have done better than bonds in producing income in the last few decades. This does not even include other options like mutual funds, real estate, or even investing in a local business.  The potential growth increase with a spread-out portfolio is something no investor should overlook.

Cashing Out Too Soon

Making an early withdrawal of money from a retirement account can affect an investor in many ways. A very dangerous withdrawal plan that is an example of this is when taking out loans from a 401(k) account. What makes it a bad idea is that the money loaned is double-taxed – first from the after-tax money from the loan itself, and then again when you withdraw money from the retirement account later. Of course, there is also the loss of compound interest since the overall amount in the account has lowered. If a person looked at their retirement income solutions ahead of time, he or she would see this error.  The answer to this is simple: Don’t make these costly withdrawals, and make sure to always have cash on hand as you put money into your retirement account.

The process of creating a retirement plan is something too important to be passive about. The options and possible mistakes can be daunting, but with enough homework and help the path to retirement can be a smooth one.

Post by Isabel

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Pros and Cons of Making a Car Insurance Claim

Pros and Cons of Making a Car Insurance Claim

I backed out of my parking space ready to finish the day and go home. Feeling exhausted, and not completely paying attention, next thing I know I’ve rear ended another car. What was I going to do? Would insurance cover this? Should I even use insurance?




If you have been involved in an accident that wasn’t your fault, and the driver of the other car is insured, then your car insurance will not be affected.  But if you are at fault, or if the other driver is untraced or uninsured, or if your car is set on fire or stolen, you may need to claim against your insurance.

But it’s common knowledge that if you make a claim against your insurance, you’ll forfeit all or part of your no-claims bonus (unless it’s protected), meaning that your premium for the following year will be higher.  That can mean that it’s tempting not to go through your insurers to pay for any damage caused.  There are pros and cons of doing this, which are set out below.

Pros of claiming under your insurance:

  • However expensive the claims become (particularly if someone is injured, or their car is damaged to an unknown extent), your insurance will pay for it all, except for your excess.
  • If your car is still driveable, your insurance policy will continue to protect you for the rest of the term of your insurance, protecting you from further claims.
  • Your insurer will usually arrange for your car to be taken to a garage if it’s not drivable, and for a garage to inspect and repair it (they would arrange the latter even if you have to take it there).
  • The work done to repair your vehicle is normally guaranteed for several months after the accident.
  • You may have a hire car or courtesy car available under your insurance.
  • You don’t have to deal with the other party to the accident other than to swap details with each other at the time of the accident.
  • If you choose to pay the other driver, they may not be entirely honest about the costs involved and may later come back and declare that they have suffered a personal injury (and your insurers may refuse to pay since they were not informed of the original accident and had they been they might have advised you to dispute liability).

Cons of claiming under your insurance:

  • You will lose all or part of your no-claims bonus unless it is protected (and if it is protected, you will lose a ‘life’ in that you may not be able to make another claim without losing the bonus).
  • A hire car or courtesy car is usually only available ‘for the time it takes to repair the car’.  The garage that your car is sent to by the insurer may not have time to start work on your car for several days or even weeks, during which time you wouldn’t have a replacement car.  If your car is then declared a write-off, it won’t ever be repaired and so you won’t receive a hire car or courtesy car at all.
  • You still have to declare any accidents if searching for cover in subsequent years, even if you still have your no-claims bonus.
  • If you have paid in monthly installments, you will have to pay the balance due for the rest of the year before your claim will be processed (that can come as a shock if you’re only one or two months into your annual policy and have to pay 10 or 11 months’ worth of premiums ahead of schedule).
  • If you are coming to the end of your period of insurance and the claim is not yet settled, you may be unable to apply for insurance elsewhere whilst the claim is outstanding – so you may be stuck with an unfavorable renewal premium from your existing insurers without being able to shop around for a cheaper quote.

Think carefully about the above and weigh up the pros and cons relevant to your circumstances before claiming against your car insurance.

For more on insurance whether for a car or a bike check out these articles.

What factors can affect car insurance quotes?
Buying Your First Time Bike Insurance
Best Real World MPG Cars Which are Better Used

 

Image by everydayplus at FreeDigitalPhotos.net

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What are the benefits of combining insurance cover?

Whether you live in a multi-car household or have a holiday home in addition to your main residence, it’s important to have a sufficient level of insurance for your assets. Although it’s possible to take out cover on multiple cars and properties individually, it’s worth thinking about being insured by a single company.

Choosing a more inclusive policy can be especially useful when it comes to protecting goods that have a high financial worth. Doing so will mean you can be sure you’re always covered, as well as deliver a range of other benefits. Read on to find out what these are.

Save time

Perhaps one of the biggest plus points to consolidating the number of companies you are insured with is that it can save you a substantial amount of time.

Think about it – having more than one insurance provider for your fleet of cars means you have to spend a greater amount of time on the phone whenever you want to renew a policy or you have a question that affects all the vehicles that you own.

Rather than having to contact a string of companies to ask them the same questions, choosing to combine individual car policies into a contract with one firm means you should have only have to make a single phone call or send one email whenever you have got a query.

Save money

Another great benefit to combining policies from a range of insurers into a single product is that it offers the potential for you to save a substantial sum of money. As its name suggests, a multi-car policy enables you to insure more than one vehicle (often up to five) with the opportunity to receive a discount depending on the number of cars that are covered.

If you are considering taking out multiple-car insurance cover, however, you should bear in mind that this does not automatically give you (or other people in your household) the right to drive each vehicle that is in covered under the policy. You can only do this if you’re a named driver, so if you want to be legally covered to get behind the wheels of all the cars in your home, you’ll need to make this clear.

Alternatively, you might want to think about incorporating insurance for your second home into the cover for your main property. If you have built up a claims-free period on either residence, you could negotiate a discount, while you may also want to add family annual travel insurance. Do the latter and you won’t have to shell out on holiday cover each time you go away, something which can be costly if you have more than one break a year.

No matter if you want to ensure your overseas holiday villa has a similar level of protection to your UK home or are keen to get a multi-car policy to protect your collection of luxury vehicles, it’s worth contacting specialist brokers like Certis Insurance. Companies such as these are able to offer tailored insurance solutions so you’re able to get comprehensive policies that are suitable for your specific needs.

What experiences have you had when searching for insurance? Let us know by leaving a comment below!

 

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How Do Interest Rates Affect Your Finances

Everyone seems to talk about interest rates, especially right now because they are historically very low.  However, two decades ago, they were extremely high.  But the real question is how interest rates affect your finances?  Here is the breakdown of you are affected.

When you’re Saving

If you’re saving money, the current interest rate definitely affects savings accounts.  If interest rates are low, you will get a lower interest rate on your money.  If interest rates are high, you will get paid a higher interest rate on your money.

You get better interest rates on long term savings, like CDs, but then you will be locked in when rates rise back up, making your future returns worth less.  When rates are low, it is best to keep money in the short term rates, so that you can take advantage when they rise again.

When you’re Borrowing Money

If you’re borrowing money, low interest rates are a blessing.  Having low interest rates means the amount of interest you will pay on your loan will be less.  Right now, with interest rates being historically low, you can save a lot of money by refinancing any money you’ve borrowed in the past.

However, when interest rates rise, the amount of interest you will pay on your debt will go up unless you have a fixed rate loan.  This put individuals who have variable or adjustable rate loans at a disadvantage.

When you’re Investing

When you’re investing, interest rates can play a little havoc with your portfolio.  If you’re invested in stocks, low interest rates typically boost the stock market because cheap capital allows companies to boost their bottom lines, which in turn boosts shareholder returns.

However, if you invest in bonds, low interest rates typically raise bond prices while lowering bond yields.  If you need the fixed income, this is a bad thing.  If you speculate in prices, this is a good thing.  However, as interest rates rise in the future, bond prices will fall, especially on long term bonds.  That is why it is a good idea to only hold short term debt.

Post by Robert

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Deciding On A Graduate School

When you are thinking about graduate school, you should always envision your long-term plan. You should have a goal set before graduate school to ensure that you stay focused on achieving excellence throughout the program. Too many students lose focus during graduate school or become unsure of what they want to do with their degree. Because you are making such a large investment by attending graduate school, it is imperative that you consider these things before you attend:

Your Financial Situation

Before you attend graduate school, take a look at your financial situation. See what type of program you can afford to attend. Consider how attending graduate school will impact your budget in the next 10 or 20 years. You want to make sure you have carefully weighed the consequences that you believe attending graduate school will have in your life.

Cost of Tuition

If is important that you also understand the cost of tuition for a graduate school program. You should know how much a graduate school program so that you can see whether it will be affordable for you. Some graduate school programs cost anywhere from $40,000 to $60,000 a year. You should make sure that you can afford this high cost. If you will be taking out loans to pay for the cost of this education, then you should make sure that you will be able to repay the loans with a job after graduation.

You should also make sure that you will have good employment prospects to pay back these funds. It is important for you to know that you will be employed so that you will not be stuck with high loans to repay upon graduation. Whether you want to be a professor or do research for a faculty department, make sure that your goals are clearly outlined so that you can begin working immediately upon graduation.

Likelihood of Employment After Graduation

In addition to tuition of the school, you should also look at the employment statistics of a graduation school. Make sure that the grad school has a reputation for putting students into the career fields they aspire to enter. Make sure that students are able to find good careers after they graduate. If you want to be a professor, then make sure you know how many students are able to enter the teaching field after graduation.

By carefully considering the information of different graduate school programs, you can make the decision that is right for you. You can also visit discover.com to weigh the pros and cons of programs.

Post by Amanda