Memorialize your Online Logins

This blog addresses ways to minimize angst and stress after a death or incapacitation.

A simple housekeeping tip: make sure that others (S.O., family) have a spreadsheet with your account logins for online banking, investment accounts, the mortgage, etc. The spreadsheet should have the name of the financial institution, a short description of the account, the login URL, and your ID and password.

I also like to review each account every quarter and post the amounts in that same spreadsheet, but that's optional. (Excel tip: if you highlight all the amounts in one column and click the Sigma/Autosum icon, it'll add them all up, and you can get a sense of your net worth.)

My friend Sarah hipped me to this service as well -- for a fee, they'll house your financial info as well as all kinds of other online logins, email, photos, videos, and the like:
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402886.html

Roth IRAs rule

You may have seen references to this thing -- what is it?

For 2010, a person who is under 50 years of age is allowed to contribute up to $5000 in a Roth IRA. A person who is 50 or older may contribute up to $6000.

However, one's modified adjusted gross income (MAGI) can limit the contribution -- in essence, if your income is too high, you can only contribute a smaller amount, or none at all. These limitations start to kick in at $105,000 MAGI for individual filers and $167,000 MAGI for married filing jointly.

The huge benefit to the Roth IRA is that it grows tax-free, and that you can take money from it (most often, having reached age 59 1/2, or using it for certain first-time home buying expenses) tax-free. There are very few investment vehicles that allow such tax benefits.

And, regarding estate planning issues, you can designate a beneficiary for your Roth IRA. The beneficiary designation allows for instant transfer upon death; the Roth is free from probate -- the lengthy, costly, yet often necessary process of wealth transfer upon death.

The money in a Roth is often invested in the stock market. Let's assume a modest 5% growth each year and do the math:

Contributions starting at age 30 and ending at age 60 = 30 years of contribution. (If you are older than 30, don't let this throw you; just start ASAP. You'll still see incredible results.)

Let's also assume you contribute $5000 each year, although the maximum rate is adjusted upward every few years -- so you might be putting even more money in as the years pass.

This means that you will have, over 30 years, contributed $150,000 to the Roth.

Compounding by that modest 5%, you will, by age 60, have $347,000. Congratulations, you have more than doubled your money -- and you get all of it, with no obligations to the IRS!

You can open an IRA online -- just go to the Fidelity, the Vanguard, the Wells Fargo websites and take a look.

Review of Mint.com

It's easier to manage your money if it's all viewable in one place. If you conduct online banking, Mint.com allows you to pull together your accounts and view them, as well as prepare a budget structure.

Mint is a cool solution with some nice features, but it's not perfect. When you create your Mint.com account, it asks you to input your login information from your bank(s), your broker, your credit cards, your mortgage holder, etc. so it can present a grid of your assets and debts. Persistence will help. Bank of America and Chase worked right away, but it took days to get Mint to recognize my ING login, and I'm still trying to get Mint and Wachovia/Wells Fargo to talk to each other, probably due to the all the merger and acquisition activity between those two and AG Edwards. Unfortunately, without that Wells Fargo mortgage information, Mint thinks that I own my home outright. (I probably never will.)

Expounding on that last point, if you have a mortgage on your home, you can input its address, and Cyberhomes.com will incorporate your estimated home market value. I don't need to tell you how depressing this can be, but it's crucial information, so, onward.

The most critical information comes from your everyday bank and your credit cards because Mint is able to view all your spending transactions and compile them in a meaningful way. It's pretty good at correctly characterizing purchases as groceries, restaurants, gas, shopping, etc., but you can manually re-characterize anything that it gets wrong. Then it shows you how much you've spent in these categories, which can be an incredible eye-opener. If you've set a budget for these categories, it will show you how much money you have left to spend, or how much you've gone over the limit. You can also view this information over time (monthly, year to date) and generate trending reports for expenditures, income, net worth, assets, and debts.

And, setting a budget is not so painful and mystifying as it can be. Because Mint is able to view what you've spent, it can generate numbers that are suggested by your previous activity. If you wish to spend less, simply adjust the number downward and see if you can make it work.

Because Mint is linked to your accounts, it can generate real-time numbers. This is very helpful, except that pending transactions are not taken into account, so you still have to log into those accounts on occasion to get a truly accurate picture of how much you really have in your checking account.

And of course Mint and its third-party affiliates try to sell you stuff. Credit cards, insurance, CDs, brokerage accounts. However, I don't find it terribly intrusive.

Give it a whirl.