I recently experienced another earthquake in Los Angeles, a fairly common occurrence for Angelenos. The earthquake was a reminder for my wife and me to check our emergency preparedness plan to ensure our spare batteries, medicines, and food supply are fresh, our children's clothes are the right sizes, and that all of our contact information is up to date. Whether it is an earthquake, hurricane, or a tornado, you must be prepared to survive in the aftermath of an emergency. Equally important to preparing a physical emergency kit is establishing and maintaining a financial emergency preparedness kit. What is a financial preparedness kit?

1. Can I reverse a Roth IRA contribution because my income was higher than I expected?
Yes. It is actually very common for people to make a Roth IRA contribution in the beginning of the year and realize later that they do not qualify for a Roth IRA. The solution is very easy and usually involves just filing out a form. Your custodian (the firm that holds your Roth IRA and sends you monthly statements) will have a form for you to complete. You can either reverse the Roth IRA contribution entirely or recharacterize the contribution as a non-deductible IRA. The non-deductible IRA option may be more appealing, especially if you want to do the backdoor Roth IRA.

1. Should I increase my car insurance deductible?
Like any insurance, the higher your deductible, the lower your premiums. But the question is how much of a deductible is reasonable? There are two types of coverages that call for a deductible: comprehensive and collision. Comprehensive coverage protects you from things like theft, natural disasters, and other non-crash related accidents while collision coverage protects you from car accidents. Here is a short list of things to consider when deciding whether to increase your insurance deductible to lower your premiums.

1. I just started at Kaiser, how can I maximize my benefits?

Most investors focus only on their retirement accounts such as 401ks, IRAs and pensions and overlook another powerful savings vehicle - the taxable brokerage account. The taxable brokerage account is like a supercharged savings account; just like a savings account, your money is accessible at anytime, but unlike a savings account, you can use a taxable brokerage account to invest in anything such as stocks, bonds, real estate, commodities, etc. The real benefits of taxable brokerage accounts are when investors use the tax laws to their advantage. Below are three of the most commonly used tactics high income earners exercise to minimize and manage their taxes.

If you are thinking of investing some of the idle cash in your non-retirement accounts before year-end, avoid mutual funds because you will owe taxes. As mutual funds buy and sell securities in the fund during the year, they incur capital gains and losses. Mutual funds are required by law to distribute virtually all capital gains made throughout the year to their shareholders in the form of capital gain distributions. These funds usually pay out yearly capital gains distributions to their shareholders of record in December. The date of record is how the mutual fund determines who is eligible for the distribution. Therefore, if you purchase shares before the date of record, you will be entitled to the distribution and have to pay the subsequent taxes even if you didn't benefit from that fund's growth during the year. While it may sound like a good idea to buy a fund and get immediate income, beware that the fund value (known as Net Asset Value) declines on the date of payment by the exact amount of the distribution. So while you receive a taxable distribution, your asset value also declines by an equal amount. Most investors prefer Exchange Traded Funds (ETFs) over mutual funds (click for an article on the differences between mutual funds and ETFs) because of their tax efficiency (most ETFs do not pay capital gains distributions). But caution should still prevail; some ETFs  may still distribute capital gains. To avoid having to pay tax on an investment you purchase in December, look on the fund's website to find out their date of record and make your purchase after that date.

1. What if I have a $1 million 401k, can I convert that to a Roth IRA?
This was a real question, but a hypothetical what-if scenario to understand the Roth IRA conversion limitations. The answer is yes, you can convert a $1 million 401k to a Roth IRA. In fact the IRS would love for you to convert a large 401k to a Roth IRA because like any conversion you would have to pay tax on the converted amount and that would be a revenue generator for the IRS. Once converted and held for 5 years, the benefits are the same as a regular Roth IRA - tax-free growth, ability to withdraw your money without tax or penalties, and of course no RMDs. So why would the IRS love such a thing? Because the IRS is shortsighted; they see the immediate tax revenue as a boon, not recognizing that they will never be paid on that money again.

1. When should I use my emergency fund?
This is a fantastic question because I commonly write about how people should maintain an emergency fund commensurate with the nature of their jobs and their social safety nets. Just to recap, the more volatile your job or the less predictable your income, the larger your emergency fund should be. However, if you have a social safety net in that you have financially stable parents, close relatives, or friends who can help you financially if you are in a pinch, the smaller your emergency fund can be. Keep in mind that you can also use a Roth IRA to maintain your emergency fund because your contributions can be withdrawn at any time without tax or penalty. But when is it ok to use your emergency fund? Here is a short list to help you not feel guilty when dipping into your emergency fund: major car or house repairs, unexpected medical bills, job loss, death in the family, etc. A vacation does not qualify. Lastly, it should go without saying that if you deplete your emergency fund, your top priority should be to replenish it pronto.

1. What is a HSA and do I need one?