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Financial quiz for all ages

Take the following quiz, prepared with the help of iTrust financial advisers, to know if your financial understanding is ahead of, or behind, your age.

Print Edition: December 13, 2007

The diet plan we recommend in this issue's cover story tells you where to invest at what age and why. But there is more to investing than asset allocation. Take the following quiz, prepared with the help of iTrust financial advisers, to know if your financial understanding is ahead of, or behind, your age. More the number of yeses, the smarter you are financially.

All questions can be answered with a simple 'yes' or 'no'.

IN YOUR 20s

Expense, credit & other basics

  1. Do you prepare a monthly budget?
  2. Have you started investing in a long-term tax savings instrument?
  3. Do you pay bills on time and understand the need to build a good credit history?
  4. Do you understand the power of compounding?
  5. Do you understand the risks and returns associated with each type of investment?

IN YOUR 30s

Goals, strategy & protection

  1. Do you have a clear idea of your financial goals?
  2. Have you got health insurance for yourself and your immediate family?
  3. Have you assessed the adequacy of your life insurance cover?
  4. Do you understand the trade-offs between buying and renting a house?
  5. Do you understand the inflation-adjusted cost of your children's education?

IN YOUR 40s

Nest egg & limiting liabilities

  1. Have you thought of when you want to retire and how much income you will need to live well?
  2. Have you thought of creating additional sources of income, such as rental income?
  3. Have you created a contingency fund to meet unexpected expenses?
  4. Do you have a pension plan in place?
  5. Do you have a plan to reduce your financial liabilities and debts?

IN YOUR 50s

Rebalancing & de-risking

  1. Have you rebalanced and consolidated your investments to prepare for retirement?
  2. Have you written a will and got it registered?
  3. Do you know which activities you want to be involved in after retirement?
  4. Have you planned for adequate health insurance coverage in your old age?
  5. Have you accounted for your maturing insurance and savings schemes and how you will redeploy the money?

AFTER YOU RETIRE

Spending wisely & living well

  1. Have you updated your will for any changes in your beneficiaries or assets?
  2. Do you know how to make tax-efficient gifts to your grandchildren?
  3. Do you have easy access to a part of your investments in case of an emergency?
  4. Have you considered investments that provide regular income to supplement your pension?
  5. Have you considered funding or donating to a charity?

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