FINANCIAL HOUSEKEEPING | Safeguard your wallet
The weeks leading up to summer – with the start of vacation travel or the beach or carefree days that frequently come with time off – is a great time to update your “wallet protection.”
If your wallet is lost or stolen, the missing cash can be a minor concern compared with the potential problems from fraud and identity theft. To avoid those woes, do not carry anything in your wallet that includes your Social Security number and keep an inventory of what you do keep in there.
To update that inventory, take your wallet to a copy machine, lay all cards and identifications on the machine and make copies of both sides. Put the copies in a safe place. If you lose your wallet, you’ll know exactly what is missing, the account numbers affected and who to call to report the cards missing.
SHORT COURSE | Defined contribution vs. defined benefit
When people speak broadly about “retirement plans” or “pension plans,” they tend to be discussing defined benefit or contribution plans. Here are the differences between the two:
Defined benefit plans provide a set amount of money that is defined ahead of time. Payments generally are based on salary and length of employment; there is no separate account for each individual, so the company sets aside money into a pension fund to meet obligations.
Defined contribution plans, by comparison, involve your own contributions, additional monies set aside by the employer, and the investment performance of those assets, all in a separate individual account. The retirement benefit of these plans – which include 401(k), 403(b) and 457 programs – is simply the amount of money in the account at the time the worker retires.
