Protecting your finances from disaster
Recent catastrophic events, ranging from natural disasters to terrorist attacks, have clearly demonstrated that the homes and livelihoods Americans have invested in over many years can be wiped out in a matter of hours. Once displaced, many victims of disasters like Hurricane Katrina struggle to get back on their feet financially. Even if you are not the victim of a disaster, you could still feel the effects of one from a financial standpoint. This was the case with Americans living far away from the Katrina disaster who felt the effects in the form of higher energy prices and other types of inflation. While there is little you can do to prevent a disaster from striking, there are steps you can take to protect you and your family from financial ruin should some type of disaster occur. Here are some strategies you can use to prepare financially for potential disasters:Store important documents in a safe box. Collect and make copies of all your key financial and personal documents, including passports and birth certificate, marriage licenses, wills, property deeds, insurance policies, mortgage records, car titles, and stock and bond certificates. Make copies of the front and back of all credit cards and drivers licenses. Keep an inventory of your accounts with customer service phone numbers. All essential documents should be stored in a bank safe deposit box or in a locked, airtight, waterproof and fireproof box. Inform family members or trusted friends of the location of the box in case you are not able to retrieve it yourself.Make sure you have access to cash. Avoid tying up all of your assets in real estate or investments that cannot be tapped without incurring significant penalties. Maintaining funds equal to three to six months’ expenses in a savings or money market account may make sense when looking at your financial priorities. You may also want to have on hand one or more credit cards with high available balances or arrange in advance a line of credit that could be used in an emergency. If you have a 401(k) account with your employer, find out whether your plan allows you to take a loan out against your account. Consider making contributions to a Roth IRA, which may carry fewer penalties for early withdrawal than other tax-deferred accounts, providing certain requirements are met. Purchase necessary insurance coverage and review your policies regularly. Many people that have had disaster claims find that their insurance policies do not cover the cost of rebuilding. If you have homeowners insurance, review your policy annually to ensure it reflects the actual replacement cost of your home and its contents. This is especially important in our area where the value of homes has risen significantly over the last few years. Many people do not have a current or comprehensive list of the valuables inside of their home. This can be easily done with a video camera (keep the tape in your “safe” box.) There are businesses that will document your valuables for you. Taking the time to create a comprehensive inventory and financial account list can save time and money should something happen to you, your home or your family. Jeffrey Apps and Tracy Tutag offer securities and investment advisory services through AXA Advisors, LLC(member NASD, SIPC) 1290 Avenue of the Americas, New York, NY 212-314-4600. They offer annuity and insurance products through an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries. They can be reached at 926-6911 or firstname.lastname@example.org.Vail, Colorado
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