4th Quarter 2017
Inside this issue:
- A New Look at SimplyGoodBanking.com
- Same Day ACH
- Taking Account Security into Your Own Hands
- Retirement Q&A
This year we set out on a mission to create and deliver a brand new website for our customers. Our goal was simple: “Enhance the user-experience”. We wanted to create a website that enabled you to navigate just as easily from a phone or tablet as you would from a laptop. We also took customer feedback into consideration and implemented online account opening and online loan and credit card application functionality enabling you to complete a loan app or open an account from anywhere.
Whether you prefer to do your banking at home or look forward to that friendly smile and warm hello when you stop by one of our offices, we believe that our new website, in conjunction with our mobile app and six locations, enable you to handle your banking on your terms, anytime and from anywhere, in-person or online.
In September the National Automated Clearing House Association (NACHA), the organization that handles ACH payments, began accepting same-day payments. This means that many merchants and billing companies may offer you the option to make a same-day electronic payment, such as to pay a bill or to transfer funds. If you agree, the funds will be pulled from your account that very same day. For example, if you have a bill due on the 25th of the month, the billing company might allow you to call or use its website on the morning of the 25th to make an on-time payment. Your funds will then be pulled from your account on the 25th. What this means for you is that you will have access to more accurate information about your actual available account balance more frequently throughout the day.
The news of the Equifax data breach that came out at the end of September is troublesome, though not unprecedented. Stories like this have made their way into the news for the better part of two decades. In our 3rd quarter newsletter, we wrote about our “Data Vault” and the procedures that we have in place to protect your sensitive information. Safeguarding your personal information is our highest priority. That won’t change and we consider that fundamental to Simply Good Banking.
In this age of technology and information, it’s nearly impossible to completely shield yourself from every type of cyber threat. What you can do is become proactive in defense of your personal information.
Here are a few simple tips:
1. Monitor your accounts
Although financial institutions use complex algorithms to monitor your accounts for odd behavior, you are the best detective when it comes to spotting unusual transactions or changes to your accounts. Checking your statements and credit score on a regular basis is a great way to be proactive. The earlier you can catch an issue the better.
2. Be wary of strangers
If you receive a phone call or email from someone requesting personal information such as your date of birth, social security number or information of that nature, red flags should go up. If you are questioning anything about the person on the other end, hang up or delete the email. You can call them back on their listed number to verify if the call or email was legitimate.
3. Common Sense
Above all else, use common sense. If something doesn’t feel right about a call or transaction follow up on your concerns. Call the business about a transaction in question or reach out to us or the credit bureau if something doesn’t look right.
Approaching retirement should be an exciting time in your life – you have traveling, spending more time on hobbies, and generally enjoying your golden years to look forward to. For many, however, retirement is a source of stress and anxiety. Have you saved enough? Do you need to keep working part-time? How will you pay for unexpected medical bills?
Creating a retirement plan early and reviewing it often is key to alleviating some of this stress. Here are a few questions to consider when checking up on your retirement plan:
How much do I need to save?
Experts recommend saving 10 percent of your annual income towards retirement for the first decade of your career. After that, increase your contributions to 15 percent of your annual income. To calculate if you're on track, there are three general benchmarks: 1) by age 35, you should have the equivalent of your annual income in savings; 2) by age 45, aim to have three times your current annual salary saved up; and 3) in your final years in the workforce you should have at least eight times your final salary in your nest egg.
How much risk am I taking on?
If you haven't reviewed or adjusted your retirement plan in a long time, you could be risking more than you should. Typically, the younger you are the more aggressive the investments in your retirement portfolio. This is because the potential for higher returns outweighs the risk of losing money because you have enough time to make up any losses prior to retiring. As you get closer to exiting the workforce, that balance shifts. It’s important to reassess your risk tolerance frequently to ensure that you're not taking on more than is advisable for your situation.
Where should I save?
There are a wide variety of retirement savings vehicles. A few of the most popular are IRAs and 401(k)’s. A 401(k) is directed by employers and contributions are deducted from paychecks, before taxes. The account is then taxed when a withdrawal is made. An IRA account is an individual account that provides tax advantages that a regular savings account does not. There are two types of both IRAs and 401(k) plans, Roth and Traditional. The basic difference is when you have to pay the taxes on the account. With a traditional retirement account, the taxes are paid when the money is withdrawn. With a Roth account, the taxes are paid upfront (when the money is added to the account), making them especially valuable to younger savers.
What will I owe Uncle Sam?
Finally, when evaluating the state of your retirement plan, be sure to factor in your current tax bracket as well as the bracket you expect to be in when you retire. If you're in a lower bracket now, make larger contributions to any Roth accounts you have since with that type of account the tax is taken out as you pay in. With traditional retirement accounts, taxes are paid when you withdraw. Roth accounts are especially valuable to younger workers, as workers are more likely to climb into higher tax brackets as they age, meaning they would owe more in taxes on the same amount of money later in life.
If you're still not sure where you are with your retirement savings, want to establish a retirement plan, or want to learn how you can start saving more, call or stop by to speak with one of our Investment Center representatives about your options. Call (608) 795-2120 to schedule an appointment.
Each year we commit a portion of our annual earnings to eligible non-profit organizations that have a focus on charitable, educational or cultural purposes for area residents. Contributions so far from January 1st to October 1st: $39,783.