Are Password Managers Safe?
/transcript
Hi, this is Linda Rogers from Planning Within Reach.
How are you storing your passwords right now?
If you're still putting them on a piece of paper, let me go through an alternative, which is to use a password manager. That's a computer program where you can store your passwords and there's a few benefits associated with that. I use 1Password, so it's 1password.com, but there's a variety of different services out there like LastPass and Dashlane. So you do need to look at your provider and do your due diligence to understand how they're all different, but I'm going to specifically talk about 1Password.
The benefits of a password manager.
Create stronger passwords.
A password manager helps you create more difficult passwords. When we create our passwords we tend to use shorter words, which are much easier to hack.
Avoid re-using passwords.
We tend to re-use passwords, which is a problem because if one website gets hacked, they take those passwords and try them on other websites.
Integrate symbols effectively.
When forced to use symbols, we tend to put one symbol at the beginning of the word and one at the end of the word. Hackers know that so it makes it much easier to go ahead and figure out someone's password.
So using something like a password manager makes it very easy to create long passwords that are super complicated and have no pattern that are just harder to hack.
Learn when a website is hacked.
The other thing a password manager does is alert you if there are any compromised websites. So for example, there was a Twitter hack that happened in 2020. When I went into my 1Password, there's a section "Compromised Websites". I was saw the Twitter login and was alerted to change that. If I hadn't been up on the news or noticed there was a hack at Target or other places, I wouldn't know to go in and change that. So that's super helpful.
Safely share your passwords.
The other benefit is that a password manager allows you to share your passwords. So, of course, you want to be very careful about who we share them with but with me in particular, I have my own vault with my own passwords, but I also have a family vault that I share with my husband. So if something were to happen to either of us, we both still have access to our children's 529 accounts, our water bill, etc. So it would be very seamless. We would not be locked out of websites and have issues paying bills, which we would not want to happen.
Store passwords safely.
The last thing is that a password manager allows you to store passwords safely. A question that I get a lot when I recommend a password manager is - what if the password manager gets hacked? So again, you need to look at each provider, but speaking about 1Password in particular - they have bank level security and they use what's called "end-to-end encryption". So that means me the user, I'm the only one that can see those passwords. They're not being transmitted anywhere. They're not going to anyone at 1Password for them to store where it could be intercepted by a hacker or at a separate site where hackers could access those passwords. Nobody at 1Password has my information. The downside is if I forget my main password - the one that I type into then access all of my passwords - I am out of luck. Nobody can help me there because they don't have my information but I am absolutely okay with that because it is the best option out there for being safe online and protecting your financial information.
I'm not a security expert but I do read a lot about this topic to help my clients protect their financial information. Everyone agrees that using a password manager is one of the best ways that you can protect yourself online. Reach out with any questions. My name is Linda Rogers, Owner of Planning Within Reach.
Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.
Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.