July 2016

Inside this Issue:

Meet Your Banker

In 125 years of banking we've learned a few things:  how to manage in good and bad economies and how to grow and change with the marketplace, but the most important thing we've learned is that it's all about people. And every good organization starts with great people. From top to bottom we feel like we have some of the best around. Visit our website or follow us on Facebook as we spotlight our employees during the course of this year and next. Learn something new about your banker and get to know the people behind the scenes that make Simply Good Banking more than just a slogan.

The Apple Pay Advantage

This spring we rolled out Apple Pay compatibility for our Peoples Community Bank Visa Credit Card. After a complete review, the features of Apple Pay met our objectives for continuous improvement in the areas of security and convenience. Designed to protect your sensitive card information and make purchases as quick and easy as possible, Apple Pay is changing the way we shop. Now you are instantly able to make purchases by simply holding your smart phone near the contactless reader at checkout and verifying the purchase with a scan of your fingerprint. There is no exchange of your confidential credit card information with the merchant and in seconds your purchase can be completed. Simple and safe. Watch for our announcement of Android Pay later this year.

Spring Shred Event

In June we held our spring paper shred event with great success. Those who stopped by to safely discard their unwanted and confidential documents helped recycle nearly 1.2 tons of paper, raised over $200 and donated nearly 75lbs of food for the Spring Green Food Pantry. Keep an eye out for our next shred event taking place this fall at our Richland Center location.

Three Tips to Keep Your Credit Score Healthy

In 2015, the average American credit score was 695. Even though that average is at an all-time high, it is far from the 720 score that is generally considered "good" by most lenders. Maintaining a 720 (or better) credit score is an essential component of fiscal health. A good score means you'll get lower interest rates on everything from credit cards to car loans and mortgages which means you'll end up paying less for big purchases. In addition, many employers now run a credit check on prospective employees so a good score can help you get a job as well! Here are three ways you can get your credit score to "good" or even "great" and keep it there:

Don't "Max Out"

One important factor in determining your credit score is your percentage of debt to credit available. If your credit limit is $10,000 and you charge $9,000, you are using 90 percent of your available credit. This is called "overutilization" and makes creditors nervous because at that level your debt-to-credit ratio is too high. If possible, try to limit your debts to about 30 percent of your total credit limit.

Keep Old Accounts Open

Think before you close that old credit card you never use anymore. The length of your credit history is a significant factor in your credit score. The longer you've had an open line of credit (such as a credit card) and made on-time payments, the better your score will be. Cancelling a credit card that you've had for a long time will shorten your credit history, which could negatively impact your overall credit score. To maximize your score, keep your oldest cards active even if you don't use them very often. Cancelling a card also reduces your total credit limit which will raise your debt-to-credit ratio.

Use Different Types of Credit

One part of a credit score that many consumers don't think about enough is the type of credit used. Diversity is essential for a good credit score. If the only type of credit you have is credit cards, consider getting a small installment loan to expand your debt repertoire. Just remember, like any kind of credit, paying on time and in full is key to making this a successful strategy.

The most important thing to remember is to use the credit available to you responsibly. Consider your purchases carefully, and never spend more than you can afford. A good rule of thumb if you're struggling with debt: if you couldn't buy it with cash, don't buy it with credit. Finally, always pay your credit card bills on time even if you can only pay the minimum amount due. While you should strive to pay off your complete balance each month, making at least the minimum payment on time will keep your credit score in a healthy range.

Answers to Common Retirement Questions

Approaching retirement should be an exciting time in your life - you have traveling, spending more time on hobbies and family, and generally enjoying your golden years to look forward to. However, for many, retirement is a source of stress and anxiety instead. 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?

Assuming that you retire at age 67 (the average) and have an average lifespan (most investment advisors recommend assuming 92 years for men, 94 for women), you need approximately eight times your annual salary in order to retire without accepting major lifestyle changes. 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.

How much am I allowed to save?

Different retirement savings accounts have different rules about how much you are able to contribute each year and whether those funds are taxed now or when you withdraw them in retirement. The current maximum annual contribution to a 401(k) plan is $18,000. The maximum contribution to an IRA is $5,500 per year if you're under age 50. Check into how much you're currently saving as part of your workplace savings plan or contributing to your IRA and see if you could be setting aside more. There are also catch-up provisions that allow people age 50 and over to save more in both IRAs and workplace savings plans.

How much risk am I taking on?

One often overlooked risk to your retirement plan is not reviewing your asset allocation on a periodic basis. Typically, the younger you are, the riskier 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 is important to reassess your risk tolerance at least every 10 years to ensure that you're not taking on more risk than is advisable for your situation.

Where should I save?

There is 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. 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 up front (pre-tax), making them especially valuable to younger savers.

If you have questions about how to get started saving for your retirement, are interested in a full review or want to look at different retirement options, speak with a representative in our Investment Center. They can provide peace of mind and help you get on the right path for retirement.

Community Support

Each year we commit a portion of our annual earnings to eligible nonprofit organizations that have a focus on charitable, educational or cultural purposes for area residents.