Here’s How Much You Should Have Saved for Retirement by Your 30’s

Start saving for retirement while you’re young. It’s easier said than done when you are just starting out, especially if you have student loan payments taking a huge percentage of your paycheck.

First, let’s determine how much you should have saved for retirement by the time you reach the end of your 30’s. Retirement plan provider Fidelity recommends having the equivalent of your salary saved by the time you’re in your 30’s. In other words, if your annual salary is $50,000, your goal should be to have the same amount in retirement savings by the end of that decade of your life.

How do your savings stack up against others your age? The average 401(k) balance for individuals between the ages of 30 and 39 is $50,800, according to data from Fidelity for the fourth quarter of 2020. However, the average employee contribution rate for Americans in this age group is only 8.3%.

One easy way to kick start your retirement savings is by taking advantage of any retirement matching program your employer offers. Those matching funds from your employer can add up fast and help you get closer to your savings goals. Not sure if your employer offers a program like this? If you don’t ask, you could be missing out on a huge benefit to you. Find out the details from your Human Resources Department if you are unsure.

Did you know First Financial has an Investment and Retirement Center which offers complimentary retirement consultations to our members?*

Stop in or call to make an appointment with one of our Financial Advisors today!

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Will Another Stimulus Payment Go Out?

A group of lawmakers has called for a fourth round of stimulus checks, just as the final payments from the third round are starting to hit accounts and mailboxes.

About a month ago, a few U.S. Senators wrote a letter asking the president to consider both recurring direct payments as well as automatic unemployment insurance extensions – as part of the Build Back Better Economic Plan.

Also known as the American Jobs Plan, the bill doesn’t yet mention a fourth stimulus check – similar to those millions have received throughout the pandemic. Rather, it’s a long-term initiative to rescue, recover, and rebuild the country’s financial standing.

In short, the president has not indicated publicly that there will be a fourth stimulus payment, rather – the current focus has been on passing the Build Back Better Plan that aims to improve transportation infrastructure and affordable housing, among other things.

Didn’t receive a third stimulus payment?

Check your eligibility at https://www.irs.gov/coronavirus/get-my-payment

Third economic impact payments did differ from the first two payments under the Trump Administration. Here’s what was different and why you may not have received a third payment:

  • Income phaseout amounts changed. Payments to be reduced for individuals with adjusted gross income of more than $75,000 (or $150,000 if married filing jointly). The reduced payments end at $80,000 for individuals and $160,000 for married couples filing jointly. Those above these levels will not receive any payment.
  • Payment amounts are different. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents would get $1,400, while married filers with two dependents would get $5,600. 
  • Qualifying dependents expanded. Unlike the first two payments, the third payment is not restricted to children under 17. Eligible individuals will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents.

For additional information or questions, visit irs.gov

Article Source: irs.gov  

Why is Everything so Expensive Lately?

Houses. Cars. Gas. Why is everything so much more expensive than it was a year ago?

If you think you’re spending more on things like gas and food than you were at this time last year, you’re right. That’s because we seem to be reopening to a more expensive economy than the one that existed pre-pandemic.

It’s not necessarily price gouging. In fact, it has a lot to do with a shortage of materials that manufacturers need to make their products. When supply is low, prices climb for manufacturers – and consumers ultimately often end up paying more for the end product.

It seems silly, but even the cereal Grape-Nuts, has been hard to come by. Kristin DeRock, the Grape-Nuts brand manager, said in a recent interview that making the unique breakfast cereal involves “a proprietary technology and a production process that isn’t easily replicated, which has made it more difficult to shift production to meet demand during this time.”

You’ve probably also noticed it’s been hard to get your hands on things like fitness gear, sofas, and lumber too. The shortages and price increases have to do with several factors. The work from home economy put never before seen pressures on companies that both struggled to estimate demand, and were forced to halt production for safety reasons.

As imports have picked up speed on the back of surging (and erratic) consumer behavior, U.S. shipping ports have become unusually congested. The early 2021 freeze in Texas also compounded these problems, suspending oil production and impacting the manufacturers who rely on it.

Tight capacity, low inventory, and fiscal stimulus have created the “perfect storm” causing both big-ticket and everyday items from hot tubs and bikes to meat and cheese, to cost a whole lot more because of the unusual conditions created by reopening.

So how long will these high prices last?

Experts agree and anticipate these disruptions may last until early 2022. Until then, the stimulus will continue to drive demand and the pandemic will continue to rattle the movement of everyday goods, keeping prices higher into early next year.

Be Aware of Tax Scams this Tax Season

The Internal Revenue Service (IRS) recently announced that the 2020 federal income tax filing deadline for individuals would be extended from April 15th to May 17th in response to the ongoing recovery efforts surrounding the COVID-19 pandemic, and to help provide taxpayers some ongoing relief.

In the midst of tax season, it’s important to be reminded that there is often an increase of fraud attempts and tax scams. Annually, the IRS shares and emphasizes certain scams that may be of risk to taxpayers. This year, scams related to Coronavirus tax relief continue to target taxpayers.

Here are a few things to be on the lookout for this tax season, as extensions can create confusion and make tax payers more susceptible to fraud attempts. The IRS recently announced the following to be aware of for the 2021 tax filing season:

  • Phishing Scams: Taxpayers should be alert to potential fake emails, texts, phone calls, or websites looking to steal their personal information.
  • Phone Scams (Vishing):  These scam phone calls work hard to instill a sense of urgency, and often threaten arrest, deportation, or some type of retaliation if a tax bill is left unpaid.  
  • Charity Scams: These schemes share bogus information about a charity to trick people into sending money or into providing personal information. This is often attempted with a fake website, using names similar to legitimate charities, or unsolicited communication. 
  • Social Media Scams: Social media scams frequently use events (lately COVID-19) to trick people into disclosing personal information. Typically, this involves convincing a potential victim they are dealing with a person they trust via email, text, or social media direct messaging.
  • Refund Theft Scams: Refund and Economic Impact Payments (EIP) as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act have been targeted in recent scams with identity theft and filing false tax returns to divert funds to the wrong address or bank account.
  • Elder Fraud: Seniors are more likely to be targeted and victimized by scammers due to unfamiliarity or uncertainty on how to respond across digital channels. 
  • Offer in Compromise (OIC) Scams: Misleading tax debt resolution companies can exaggerate chances to settle tax debt through an Offer in Compromise (OIC) and submit false applications for candidates. OIC offers are available for a bill reduction, but taxpayers must typically meet very specific criteria under law to qualify.
  • Payroll and HR Scams: Phishing scams are designed to steal W-2 and other tax information. This scheme has increased with many businesses still closed and employees working from home due to COVID-19. W-2 forms contain sensitive information and are highly valuable for identity thieves.
  • Ransomware Scams: This cybercrime targets human and technical weaknesses to infect a potential victim’s computer, network, or server. Once infected, ransomware looks for and locks critical or sensitive data with its own encryption. 

Consider these preventative tips to keep your personal and financial information safe this tax season:

  • Be cautious of communication: Communication requesting personal or financial information – tax related or otherwise, should be treated with caution. The IRS and state tax authorities will never reach out by phone, email, text, or social media.
  • Pay attention to how money is requested: The IRS does not require that taxes or bills be paid with a prepaid/reloadable debit card, gift card, or money wires through services like Western Union or MoneyGram.
  • Report threatening messages: Calls demanding immediate payment or threatening legal action are more than likely scam attempts. The IRS or state of residence will not call to discuss taxes you owe without first mailing you an official bill.
  • Don’t open attachments or click on links: This is especially true if you have suspicions about the communication source you received, which may contain a malicious code or virus that will infect your device. Cybercriminals will often use a phishing email to trick a potential victim into opening a link or an attachment containing ransomware.
  • Be wary of rejected file requests due to duplication: If an e-filed return is rejected because a duplicate EIN/SSN is already on file with the IRS, or an unexpected receipt of a tax transcript doesn’t correspond to anything previously submitted – it may be a warning sign of identity theft. 

If a tax scam is suspected, report it to your state authorities and/or the Federal Trade Commission here.

Find out more about tax scams from the IRS website here.

Think First because There’s Harm In Not Knowing!

Article Source: CUInsight.com

It’s National Credit Union Youth Month, Are Your Kids Money Savvy?

April is National Credit Union Youth Month, so we wanted to take a moment to highlight the importance of spending the time and energy to make sure your kids have some basic knowledge about money.

Did you know?

  • From 2004 to 2009, the median credit card debt among college students increased 74%
  • A report on the results of a financial literacy exam found that high school seniors scored on average only 48% correct.
  • A survey of 15 year old’s in the United States found that 18% of respondents did not learn fundamental financial skills that are often applied in everyday situations, such as building a simple budget, comparison shopping, and understanding an invoice.

With such a staggering knowledge gap, it’s easy for kids to grow up and fall victim to scams, high interest rate loans, and rack up an enormous amount of debt.

So, at what age is it right to start teaching your kids good financial habits? The short answer is – right now.

By age 3, your kids can grasp some basic money concepts. By age 7, many of their money habits are already forming. No matter what their age, let’s take this opportunity during National Credit Union Youth Month to start!

Does your child have a savings account or a safe place to deposit any money they receive?

Teaching your child the importance of saving money for a rainy day, should begin at an early age. If your kids don’t have a savings account, get them started with one as soon as possible.

First Financial offers a First Step Kids Savings Account for children up to 18 years of age. There are no minimum balance fees, and dividends are posted quarterly on balances $100 or greater.*

The moral of the story is the following: Take the time during National Credit Youth Month, to talk to your children about finances, budgeting, and saving money. It’s never too early (or too late)!

*As of 7/2/2020, the First Step Kids Account has an annual percentage yield of 0.03% on balances of $100.00 and more. The dividend rate may change after the account is opened. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location.  Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties.

Winter 2021 Newsletter

We hope all our members and their families are staying safe and healthy, as we begin a new year. Below is a digital copy of our Winter 2021 Quarterly Member Newsletter!

Please take note of the following upcoming important dates:

  • Monday, March 15thOnline Banking and Mobile App Upgrade
  • Monday, March 22ndCredit Card Conversion (* All current credit cardholders will be mailed a new credit card in early March and will need to activate it beginning on 3/22 regardless of if their old card has not expired. Previous credit cards will not work as of 3/22 at 6:45am EST and there will be new customer service numbers and a different billing address for sending monthly payments ).

In a continued effort to go green, we’re publishing our newsletter electronically – it can also be found on our website and social media sites. Paper copies will be available in our branch vestibule areas.

The Winter Newsletter features the following articles:

To view a copy of the newsletter, click here.

We hope your 2021 is off to a great start!