Published Monday, January 14, 2013 at: 7:00 AM EST
Do you have a safe deposit box at your bank? That’s a good idea if you need a secure place to store valuables and important papers. But be aware that a safe deposit box isn’t the best place for everything.
What should you keep in the box? Unless you are an international spy needing multiple passports, currencies and firearms, mostly they are items you can’t afford to lose or that would be extremely difficult to replace. This includes birth certificates, marriage certificates, a list of your insurance policies (usually, if you have the company name, insured and policy number, these can easily be replaced), trust and IRA documents, property deeds, rare coins, jewelry, stock or bond certificates, foreign currencies, treasured family photos, and other heirlooms. Don’t worry about privacy because the bank can’t snoop in its boxes. In fact, when you place items in the box, you can do so behind closed doors.
What should you keep out of the box? Basically everything else, including your will and related estate-planning documents. Depending on state law, a court order may be required to unseal the box if the owner dies. It’s better to keep your will in a fire-proof safe accessible to other family members. You might also consider keeping a password protected electronic copy of any documents you hold in the box itself OUTSIDE of the box for ease in reference and access.
Also, don’t use a safe deposit box to store documents such as a power of attorney that might be needed suddenly in case of an emergency.
Finally, what about keeping cash in a safe deposit box? This isn’t a good idea, either. That cash isn’t insured under Federal Deposit Insurance Corporation (FDIC) rules, which normally insure deposits in your accounts up to $250,000. Generally, to access the box the bank has to be open. If it is open, then you can get cash from the teller. Therefore, if you are thinking “emergency” when you think of a cash hoard, it might be kept where you can get your hands on it, 24/7. Perhaps, a good fireproof safe in your home that is secure or concealed might work best.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.
An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.
Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
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