How to Keep Your Money Safe in 2009 – Part 2

Today, we continue on with a few more action steps you can take now to make sure your money is as safe as possible in today’s changing economy. If you missed the last segment, make sure you catch up! It had some valuable information on saving on taxes and maximizing every penny you’ve got in even the toughest economy. Review it here at:

Now, we continue highlighting a few areas of your financial life that you might want to pay attention to…

Is your single-premium fixed annuity safe?
If your insurance company goes under and you have a single-premium fixed annuity, then a state guaranty fund will step in to cover annuity payments, but only up to a certain limit (usually up to $100,000). Check to find out what your state’s guaranty limit (you can locate your state’s insurance department online at www.nohlga.com), and if your annuity exceeds your state’s limit, then you need to figure out if the money at risk is worth it, or if you should cash out. It’s a personal decision but it might be something you want to look into.

Is all the money you have stored in banks and credit unions fully insured?

Check to make sure that your bank is a member of the Federal Deposit Insurance Corp. (FDIC). (Go to www.myFDICinsurance.gov)

If you’re with a credit union, make sure it’s part of the National Credit Union Administration’s insurance fund (NCUA) (visit www.ncua.gov to check on your credit union’s status).

Things have changed in 2009. Each individual used to have up to $100,000 of their money insured, but starting in 2009, banks and credit unions now insure each person up to $250,000—until December of 2009. So, if you have more than $250,000 in a bank, you potentially have unsafe money. And even if you have $110,000 in one bank, you might not be safe. After 2009, we don’t know what will happen. If the banks and credit unions lower their coverage back to $100,000 per person, you might have $10,000 in uninsured money. Try to spread out the money you have into different $100,000 deposits (or go with a CD that expires in Dec of 2009).

Being financially sound in the future will require a mixed bag of precaution and faith. It’s smart to pay attention and keep a good head on your shoulders despite the quick-changing nature of our financial industries. If you’ve got some time until retirement, consider this recession as a great tool to learn about strategic moves you can make to protect yourself and win in the long-run.