Could Your Next Stockbroker Be a Credit Union?

Can a not-for-profit credit union, like First Financial, give you the same level of service as a for-profit commercial bank? On many fronts, the answer is a resounding yes!

Credit unions have plenty of features that make them an attractive alternative to America’s big commercial banks:

  • Good rates on loans: As a general rule, credit unions are run for the benefit of their members rather than for the benefit of owner-shareholders. As a result, they’re often able to offer low interest rates on credit cards and other loans that few of their for-profit banking peers are able to match.
  • Competitive dividend rates on deposits: Credit unions are often able to easily trump the national average of 0.1% dividends paid on savings and money market accounts.
  • Lower fees: The majority of America’s credit unions have maintained the benefit of “free checking,” when very few of America’s big commercial banks still offer the service.

But for investors, there’s still one big hole in the credit union story: stock trading.

In the competitive, complex world of banking services, it’s a reasonable question: Do credit unions offer online brokerage accounts? Is there a credit union out there where you can open a checking account, sign up for a credit card, take out a car loan, and trade stocks, all in one shop?

As it turns out, there is. Or rather, there are. Quite a few of them, including First Financial.

Time to Meet the Broker

According to Bankrate.com, there are 7,351 credit unions operating in the United States, handling nearly $1 trillion in assets and serving 93.9 million customers.

Now granted, not all of these credit unions offer brokerage services. That’s not surprising. After all, not all banks offer online stock trading.

What’s actually more surprising is that quite a few credit unions do offer brokerage services, usually by teaming up with outside brokers.

CUSO or CUNA Who?

Now admittedly, most of these brokers aren’t exactly household names. If you’re looking for a credit union that’s partnered up with a Charles Schwab or E*TRADE Financial, you may be in for a long search.

As the first couple of letters of these brokers’ names — “CUSO” and “CUNA” — suggest, at least some set up shop with the specific intent of targeting the specific market niche of Credit Union members. That said, the brokers listed don’t look to be fly-by-night shops.

San Diego-based CUSO Financial Services, for example, has been in business since 1996. CUNA Brokerage is a division of Madison, Wisconsin-based CMFG Life Insurance. Here at First Financial, our Investment and Retirement Center partners with CUNA Mutual Group to provide our members with investment, insurance and brokerage services.

So if you’re dead-set against big banks but don’t want to give up on the idea of managing your own retirement portfolio — you may not have to. There are options out there for people who’d like to switch to a credit union but who also want to keep trading stocks, mutual funds, and ETFs. First Financial can do that for you!

If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 732.312.1500.

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. Nondeposit 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.

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10 IRA Tax Tips

Knowing these 10 IRA tax tips can help you when saving for retirement. When preparing taxes and setting up retirement accounts, it’s important to know how your IRA or individual retirement arrangement affects your tax return. Being knowledgeable will allow you to make smart decisions when contributing to an IRA and how to handle the account in the future until you request disbursement at retirement.

Use these ten IRA tax tips to make smart decisions regarding your retirement future:

  1. Money contributed to a traditional IRA is not taxed until disbursement. Not including Roth IRAs, the person who owns a traditional IRA is not taxed until they request money from the IRA during retirement. Usually, the person’s tax bracket is lower during retirement, saving the person money by waiting to pay taxes until they are retired.
  2. IRAs can only be owned by one person. When the person owning the IRA dies, a beneficiary can be awarded any portion of the monies in an IRA that remains.
  3. Use the correct form. When making nondeductible contributions to a traditional IRA, the taxpayer has to use Form 8606, Nondeductible IRA’s.
  4. Know if you are eligible for a tax credit. Use form 8880, Credit for Qualified Retirement Savings Contributions to find out whether you qualify for a tax credit.
  5. Persons can contribute to a traditional IRA up to the age of 70 years old.  If you are 70 1/2 years or more old at the end of a tax year, you may not contribute to a traditional IRA that year.
  6. To be eligible to contribute to a traditional IRA, the person who takes out the IRA or their spouse must have taxable income from specific sources. Income can come from a salary, wages, self-employment income, tips, commissions, or bonuses. Also included are taxable alimony and maintenance payments that the owner of the IRA received during the tax year. Income that does qualify includes deferred compensation, rental property income, pension or annuity compensation, and dividend and interest income.
  7. Contributions to an IRA can be made up till the tax filing date. You can contribute for the applicable tax year (the previous year) until April 15.
  8. Funds withdrawn from an IRA are taxable the same year they are withdrawn. Withdrawals of only deductible contributions are fully taxable.
  9. Early withdrawal may be taxable. Owners of traditional IRAs who withdraw monies before they are 59-1/2 years old may have to pay an additional ten percent tax.
  10. Late withdrawal may be taxable. Owners of traditional IRAs who do not withdraw the minimum amount after they turn 70-1/2 may owe an excise tax.

Contact the First Financial’s Investment and Retirement Center to set up a no-cost consultation at 732.312.1500 or visit our website for more information.

Article Source: Made Manual, Instructions for Life http://www.mademan.com/mm/10-ira-tax-tips.html#vply=0

A CD or a CD-Type Annuity? How they Compare and Why Annuities are so Attractive

If you’re a conservative investor, you may be wondering what fixed-rate alternatives you have to certificates of deposit. Have you ever looked at fixed annuities? Specifically, fixed “CD type” annuities? Right now, they look a lot better than CDs do.

Yes, CDs are FDIC-insured. But fixed annuities come with a guarantee as well, and often a better rate of return – plus the opportunity for tax-deferred growth and compounding.

The drawbacks of CDs. The interest rate on CDs today is often disappointingly low – often well below 5%. Besides the pitiful return, you have another disadvantage: the interest your CD earns is fully taxable.1 (And FDIC or no FDIC, do you really want your money in a bank right now with the hassles bank customers are going through?)

But you have an alternative.

The appeal of the “CD type” fixed annuity. Just like a CD, a “CD type” fixed annuity is designed to grow your money over a specified term until maturity – usually five or ten years. Right now, some of these annuities are earning well over 5% interest.2 (The interest rate is locked in for the whole term of the annuity, unlike some fixed annuities where the interest rate is only guaranteed for one year.)

Unlike a CD, a “CD type” fixed annuity gives you tax-deferred growth. The earnings aren’t taxed until withdrawal.3

With five- and ten-year terms, these annuities are particularly appealing to people in their fifties who are seeking a conservative retirement savings vehicle.

Learn more. If you think of yourself as a risk-averse investor, you might want to examine the range of options in fixed “CD style” annuities. Before you make a decision, make sure you talk to a qualified insurance agent or financial advisor who can explain the terms and conditions of these annuity contracts.

If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial, contact them at 732.312.1500 or visit our website for more information.

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. Nondeposit 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.

Citations.

1 streetauthority.com/terms/c/cd.asp [8/08]

2 annuityadvantage.com/annuitydata.htm [8/22/08]

3 investopedia.com/terms/d/deferredannuity.asp [8/08]

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What You Should Save By 35, 45, and 55 To Be On Target

Getting started is half the battle when it comes to building retirement security. Setting near term goals are important too. Here’s how to do both.

Financial rules of thumb are just that. If you follow them, you have the satisfaction of knowing that you’ve taken action — but they do not guarantee you’ll get the results you desire. Still, in the savings game guideposts can be especially useful. A near-term target will help you get started, and that’s half the battle.

Here is a recently put together, age-based savings guideline with a range of savings goals that can be applicable to anyone.

Here are the guideposts:

  • At age 35, you should have saved an amount equal to your annual salary.
  • At age 45, you should have saved three times your annual salary.
  • At 55, you should have five times your salary.
  • When you retire at age 67, you should have eight times your annual pay.

There are benchmarks to hit along the way. Having near-term targets helps you stay on track—and take the necessary steps to catch up while time is on your side. But there is nothing easy about hitting these targets. It is assumed that:

  • You begin saving in a workplace retirement plan, such as a 401(k), at age 25. You save continuously and without interruption until age 67.
  • You start by making an annual salary contribution equal to 6% of pay, and raise the figure by one percentage point each year until you are saving 12% of your pay.
  • Your employer matches you at 50 cents on the dollar up to 6% of your pay and your portfolio grows 5.5% a year.
  • Social Security is factored in.
  • Your income grows 1.5 percentage points faster than inflation each year.

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These assumptions are reasonable in terms of building an illustrative savings model. But consider that almost no one starts saving at 25 and millions suffer some sort of job interruption over an approximate 42-year career. This model also has you saving 12% of your pay by age 32. A common rule of thumb is 10% and again, most folks don’t get serious about saving until they are in their 40s and 50s.

Meanwhile, you will need a healthy slug of stocks to earn 5.5% a year. Yet individuals have been net sellers of stock mutual funds for at least half a decade. Whether Social Security will be available when you retire is an open question. In some cases many people are not earning as much as they used to earn, and not keeping up with the rate of inflation.

Of course, it would be a mistake to extrapolate the experience of the crisis years indefinitely into the future. Still, this exercise points up the difficulty of reaching retirement security without an early start, or hyper-aggressive saving at midlife. No matter your age, at least now you can see where you stand – and what to do about it.

Contact the First Financial’s Investment and Retirement Center if you would like to set up a no-cost consultation at 732.312.1500 or visit our website for more information.

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. Nondeposit 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.

Article Source: http://moneyland.time.com/2012/09/21/what-you-should-save-by-35-45-and-55-to-be-on-target/#ixzz29fOYAuY7

What Do You Really Know About Social Security?

Many consumers are left scratching their heads wondering what’s happening with Social Security. Most importantly, will it be there when you need it?

Unfortunately, we don’t have a crystal ball that accurately predicts the future, so all we can do is learn where the program is now and hope for the best in the future.

For most Americans, Social Security is an integral part of their retirement plan. Sadly, for just as many, it is their only retirement plan.

Let’s review. Depending upon when you plan to retire, there are some important options to consider:

  • At this time, approximately 75% of retirees receive reduced benefits1.
  • A majority of workers don’t recall getting a Social Security statement detailing their benefits1.
  • Only one-third of potential retirees have reviewed their benefits with a financial planner to determine where they will need to supplement their retirement income1.

Considering the fact that many Americans will rely on their Social Security, these are sobering statistics indeed!

The income you receive from Social Security varies depending upon the age you retire and your marital status. It’s a good idea for spouses to coordinate their retirement strategies to ensure they enjoy a good quality of life post-retirement.

The Investment and Retirement Center located at First Financial Federal Credit Union can work with you to help you better understand what your options are and how to prepare to get the most out of your retirement years. Remember, knowledge is power!

For additional information about your Social Security and retirement, please visit the Investment and Retirement Center at First Financial or call to set up a no-cost consultation at 732.312.1500.  You can also visit our website for more information.

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. Nondeposit 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. FR091225-2315

Article Source: http://www.socialsecurity.gov/

Retirement Healthcare Planning in an Uncertain Environment

These days people are living longer than ever – and we’re all for that! But living longer does come with a tricky problem: The longer you live, the more likely you are to require extensive (and expensive) health care services. That means you’re incurring the highest healthcare costs during the part of your life when you’re not working – so you’d better have excellent insurance, good retirement income or both.

No one who plans to live long can escape the necessity of at least preparing for health care costs during their golden years. Even if you never need anything besides prescription medication, it will take a serious bite out of your retirement income.

How to prepare?

Obviously, Medicare makes a big difference, and the addition of Medicare Part D a few years ago expands coverage of prescription drugs, just as the emergence of generics has reduced the cost somewhat. But planning for what could be decades of escalating healthcare costs can’t assume the best-case scenario. At the same time, it’s hard to do long-term planning when no one knows what the law is going to be. If the health care reform passed in 2010 takes full effect as scheduled in 2014, the overall health insurance pool will look quite a bit different, but Medicare is set to remain largely the same – although money has been diverted from Medicare to pay for expanded coverage. It’s hard to predict the effect of that.

If this year’s election results in the law’s repeal, it’s difficult to say what will come in its place. One plan would leave Medicare unchanged for those 55 and over but go to subsidized insurance premiums for many of those who will be eligible in future years.

How do you plan when you don’t know what’s going to happen? The best approach is to plan for what you do know. It’s reasonable to assume that a percentage of your retirement income will be eaten up by healthcare costs, including nursing home costs in later years. So as you budget for your living expenses during retirement, put aside a reasonable percentage to keep available for health care expenses. If you don’t need to spend all of it – great. Roll it over. But never stop putting aside that percentage, because you have no idea what will happen with your health as you age, so you can never assume that this year’s light health care spending will be followed by more of the same.

Planning for the worst case scenario is the best approach. Wherever the law goes, at best you stay prepared.

To get more information on planning for your retirement, contact First Financial’s Investment and Retirement Center at 732.312.1500.

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. Nondeposit 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. FR081220-218B