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Financial resolutions for 2013 can create healthier future

Financial resolutions for 2013 can create healthier future

January 14, 2013
Most Americans will make at least one New Year's resolution on Jan. 1. Many will resolve to eat healthier, quit bad habits or lose weight. But a local financial advisor is challenging Henderson residents to get their finances in order in 2013 by focusing their resolutions on becoming money wise.

"The best gift you can give to your future self is financial security," says Brad Zucker, Registered Financial Consultant and president of Safe Money Advisors.

"By making resolutions to improve your personal finances, and taking action, you can be on your way to a sound financial future."

Zucker offers these four resolutions for improving your financial situation in 2013 and beyond.

1. I will save at least six months of living expenses in an emergency fund.

Twenty eight percent of Americans have no money saved in a designated emergency fund, and 42 percent only have three months worth of living expenses saved.

When an emergency happens, the money needed to get by isn't there. Rather than relying on their savings, many are forced to max out their credit cards, pull money prematurely from their retirement savings (having to pay expensive penalties and fees in the process), or end up becoming a financial burden on family and friends.

Make a goal of saving enough in your emergency fund to cover at least six months of living expenses. Then when something does go wrong, you can be confident that you can manage the situation at hand. Make sure your emergency fund is saved in a manner with very little risk and easy accessibility, such as in a bank.

One way to save diligently is to automate your savings. By having a specific amount moved from your paycheck or checking account into your savings account every month, you will be less likely to miss that money.

2. I will contribute the maximum amount possible to my IRA or 401(k).

Americans ten years away from retirement have saved just $78,000 on average, even though the Employment Benefit Research Institute says the average worker will need to have saved $900,000 to maintain his or her lifestyle after retirement at 65.

People are living longer than ever before and they need to make sure their savings goes the distance. Rising costs in retirement, such as healthcare or cost of living, aren't taken into account when saving, and neither is the possibility of higher taxes.

Couple that with inflation and a dollar saved doesn't go as far as originally thought. Saving for retirement is incredibly important, and the sooner you start, the better off you'll be. IRAs and 401(k)s are great ways to save because the accounts are tax-deferred.

IRA contribution limits have increased for the first time since 2008 up $500 annually to $5,500. As of right now the catch-up provision of $1,000 for those 50 years of age and older is still in effect for 2013. The maximum amount you can add to a 401(k), 403(b), most 457s and Thrift Savings Plans rises from $17,000 to $17,500 with an additional $5,500 if you are over 50.

3. I will understand my risk tolerance and set up my investments to match.

The closer you are to retirement, the less time you will have to make up your losses if the stock market takes an unexpected drop. Conversely, if you have time on your side, you can tolerate the ups and downs the market may bring.

This year, take a moment to consider your age and timeline to retirement so that you can best determine your investor personality. Are you a conservative investor? If you are fewer than five years away from retirement, the answer is most likely yes. Are you a balanced investor?

Many younger baby boomers are still taking on risk to grow their savings for retirement, but have as much as half of their investment dollars, (and in some cases more), in more conservative investment vehicles.

Are you an aggressive investor? If you're just starting out and have time on your side, or if you have money to lose, then this may be your investor personality. Take some time to determine your risk tolerance and invest accordingly in 2013 and beyond.

The market is just one piece of an investment portfolio – be sure to consider insurance, commodities, real estate, government bonds and more so that you are fully diversified and invested the right way for you and your unique situation.

4. I will check my life insurance policy and make sure I'm properly covered.

With all of the competitive insurance providers out there today, now is a great time to review your life insurance policies to see if it's time for a change. Has there been a birth, death, marriage or divorce in your family in recent years?

If so, review the beneficiaries of your policies to ensure the appropriate people are added or removed. Do you have enough coverage for your heirs to do as intended? If not, it may be time to increase the amount.

Many insurance policies have become less expensive in recent years, and with the variety of insurance products out there, many come with different riders that can provide you with additional protection.

For example, if you decide to purchase life insurance, you may be interested in adding a critical illness rider – this rider ensures a lump sum payment to be made and used for any purpose during the course of your critical illness treatment.

If you feel you're paying too much for any one policy, consider bundling policies with one provider, or shop around to see if you can find more coverage for a lower premium.

"By making these four resolutions and sticking to them throughout the year," says Zucker, "you can improve your financial security now and in the future."

Bradley Zucker, financial educator, president, and chief financial advisor of Safe Money Advisors, Inc., a Las Vegas-based independent financial advisory firm. They specialize in comprehensive financial and retirement planning including conservation of capital, preservation of principal, tax-advantageous distribution of a life-saving and competitive asset growth -- with little or no downside risk. For more information about Mr. Zucker and Safe Money Advisors, Inc., please visit

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