Retirement Investments Made Easy – Choosing an IRA

When you’re young and just breaking into the workforce, the last thing on your mind is saving for retirement. Ignorance can be bliss in that regard. But in reality, you should focus on starting a retirement plan at your job as soon as possible. The more money you have saved now, the better off you’ll be for it at a later age.

According to the Federal Reserve, nearly one-third of working-age Americans have no retirement savings or pension. That also includes 25 percent of non-retired people over the age of 45.

For a lot of Americans, retirement planning starts and ends with their employer’s retirement options, often called a 401(K). But not every employer offers a retirement plan and many people are forced to look elsewhere for retirement options.

Usually, an IRA (Individual Retirement Account) is the best place to start if this is the case.

It can be very confusing to figure out what kind of plan to choose when you haven’t looked that deep into retirement planning. The first thing you have to figure out is the difference between a Roth IRA and a traditional IRA.

Choosing an IRA

A Roth IRA is a great choice if you expect your tax rate to be the same or higher in retirement. Withdrawals in retirement are not taxed. A traditional IRA might make a good choice if you expect that your tax rate will be lower in retirement because contributions made now are deductible.

Both IRAs have income thresholds that govern who can make qualified contributions to the accounts. Contributions made to the accounts are made after taxes are paid, so there is no deduction. The contribution always grows tax-free.

How to invest your money isn’t an easy choice. It requires a lot of homework on which direction is best to take. The safest bet is picking investments in the stock market. Taking risks when you’re younger is safer than when you’re older.

Investors with 10 or more years left until they retire can also afford to take risks and go for high returns offered by the stock market rather than playing it safe with certificates of deposit and bonds. The good thing is you can’t lose money in safe investments, but the bad part is you can’t make that much, either.

You can open an IRA at most financial institutions, including TopLine Federal Credit Union. TopLine can help you prepare for your financial future with our specialized investment services.

Reach us at 763-391-9494 or learn more at www.toplinecu.com!

 

How to Manage Your Student Loans

Student loans are among the greatest financial obstacles for an individual to pay off. With student loan debt surpassing credit card debt for the first time in history, it’s a major concern for students and former students to address. As any college graduate will tell you, the six-month, payment-free grace period you are given following graduation will come sooner than you can imagine. Do you have a loan repayment plan in place yet?

Studnet Loans

In order to assist with your student loans, TopLine Federal Credit Union has partnered with LSS Financial Counseling to provide free Student Loan Repayment Counseling. With LSS Financial Counseling, you can learn how to start and make every payment, how to consolidate your loans, discover loan forgiveness programs, and find more tips on financial security. LSS can help you navigate through options and take the steps needed to pay off your student loans.

Take a peek at some quick tips to get you started on managing your student loans:

Determine What You Owe
Between federal and private student loans from various providers, it can be difficult to keep track of every loan you have. An efficient loan repayment plan will be dependent on the type of loans you have taken out throughout your college career. Fortunately, many schools have an online loan education class that is required of graduating seniors in order to inform students of the loan process. You can also find a list of federal loans at the Department of Education’s website—nslds.ed.gov— and private loans on free annual credit reports at Annualcreditreport.com.

Discover Repayment Plan Options
Federal student loans have various repayment options that help keep your loans affordable. Different options allow you to work with your budget by lowering your monthly payment and consolidating your loans. In repayment plan options, you can opt for a standard 10-year plan which stretches your payment over 25 years or request a payment based on your income. If you have multiple federal student loans, loan consolidation may be a good option to take care of your student debt. This can help streamline your loan payments because you only have one monthly payment to make. Check with your provider and research your options at studentaid.ed.gov.

Explore Loan Forgiveness
In certain circumstances, it could be possible for you to have your federal student loan forgiven, canceled, or discharged which mean that you are no longer expected to repay your loan. This option would alleviate much of the financial burden of student debt. If you work for a government agency on any level, a 501c3 non-profit, or another non-profit providing health or public safety services, you may qualify to have your federal student loans forgiven after 120 payments on those loans. Learn more about federal student loan forgiveness here.

Need further assistance in navigating student loans? As a TopLine Financial Credit Union member, you benefit from free, confidential, and professional help through LSS Financial Counseling. To schedule a visit, call LSS at 1-800-528-2926, or visit our partnership page.

 

Teaching Your Kids to be Financially Literate

Teaching Your Kids

April is Youth Financial Literacy Month, so we thought we’d share why we find financial literacy among our youth so important.

As parents, we want our kids to be successful and to make the right choices. We try our best to teach them all that we know, so how has financial literacy escaped conversation at the dinner table? If we’re not talking about money and finances with one another, how do we expect to teach our kids to become financially stable?

The Child Development Institute lists some good ideas of how you can teach your kids the value of money. The main points are:

 

  • Provide an Allowance. They’ll need somewhere to start. Give your kids a weekly or monthly allowance, or provide chores around the house for them to complete to earn some spare cash.
  • Lead by Example. Teach your kids to separate their funds into pools or pots. One can be for savings, one for a new toy or goal they want to achieve, one for a gift for their parent/grandparent/sibling, and so on. Show them one of your utility bills and make a goal of lowering it for the next month. This will teach them the effect using every-day utilities has on monthly bills and income.
  • Provide Practice. Play games with your kids that teach them the value of a dollar. Monopoly is the most common and popular for this, but can be difficult for younger kids. Check out Kids.gov to find alternative, age-appropriate games.
  • Give Feedback. Support your teachings and lessons with praise and encouragement — include rewards in exchange for good financial decisions. Also, give your children suggestions and direction for better financial decisions if they seem to be getting off-track.

 

TopLine’s Get Smart with your Money program
We believe that it’s never too early to talk with your kids about money, which is why we have the program Get Smart With Your Money — a financial education enterprise that encourages conversation about money among your family. There are three different age-specific groups that tailor to the needs and understandings of your children:

Building Dreams (ages 5-8)

  • This is a baseline course about the concepts of spending, saving and sharing. It will involve storytelling, worksheets, and other fun activities.

Dollar Power (ages 9-13)

  • Inspired by the National Endowment for Financial Education and the Money Smarts curriculum offered by the National Association of Federal Credit Union, this course teaches the difference between needs and wants, planning and goal setting, saving and paying yourself first, spending wisely and gift cards. Kids will be given real-life scenarios and asked questions about the importance of saving and spending wisely.

Dollars & Sense (ages 14-18)

  • This course digs deeper into the concepts that were taught in Dollar Power and expands further on sound money management, checking accounts, debit and credit cards and the significance of credit. Again, students will be taught by example with real-life scenarios and thought-provoking questions.  

These sessions are offered Saturday, April 23 and Thursday, October 18 at 11:30 AM. They will be held at TopLine’s Maple Grove Learning Center located at 9353 Jefferson Highway.

For more information, give TopLine a call at 763-391-9494 or you can register online.

 

Creating a Savings Plan for the Year

Creating a

January is coming to a close, and with it, many people’s New Year’s Resolution hopes. Each year, the top resolutions are about losing and saving: losing weight and saving money. Both can seem like daunting tasks, and although we aren’t experts on weight loss, we do know a thing or two about saving money.

Make Financial Goals
Saving for something special this year? Planning on making a major purchase or home improvement? Sending kids off to college soon? Setting goals for yourself is the first step in making a yearly savings plan. Setting a financial goal for yourself sets your destination in view and creates a timeframe to fulfill it.

Set a Budget
The most important aspect to setting a budget for a savings plan is to be reasonable and realistic. Base your budget on your income and monthly bills — and be sure to keep it flexible, if only at first. People can be overly optimistic about money before their plans are put into practice, and can become discouraged about getting on track.

Cover Small Debts First
This goes along with being realistic; smaller debts are easier to overcome than larger ones, and you don’t want to be paying more interest than you need to. Prioritize your loans into manageable payments and resolve to pay off smaller ones first.

Save for a Rainy Day
According to gobankrates.com, 36 percent of Americans have less than $1,000 in savings. No one knows what the future will bring. You best line of defense is being prepared for the worst. Start a savings account and add to it each month. Even if it’s as little as $20, it’s better than nothing. Save your change in a jar and deposit it at the end of the month, cut back on superfluous spending, turn your thermostat down a couple degrees — whatever you decide, small savings do add up, and they get you in the mindset to build a nest egg. Thesurvivalmom.com has a fantastic savings plan you can use or reformat to fit your budget.

It’s not hard to put a little money away each month — the difficult part is making a reasonable plan and achievable goals, especially a long-term plan for savings. TopLine Federal Credit Union has a ton of savings options to help you reach your goals. Our savings account rates are calculated daily to ensure you the best possible account earnings.

Don’t be another end of January statistic; start your savings off on the right foot, and by the end of the year, you’re sure to see that your dedication -— quite literally — pays off!