Tuesday, September 24, 2013
All GCF Bank customers who were account holders on August 26, 2013 should have received a proxy statement in the mail last week. If you haven't already returned your card, please do it promptly. You may also attend the special meeting of members to vote in person. The details were included in your proxy statement, and also published in this issue of GCFlash.
Our Current Rates:
For a listing of our current deposit and loan rates, click here.
Savings rates have been flat for a long time. Even when the Federal Reserve begins tapering off our historical low rates, it will be quite a while before they reach a mark where cash left in a deposit account actually earns a decent yield.
The move to spur the economy through lending has hurt us in the pocketbook. But you already know this, particularly if you're nearing what you had hoped would be your golden years.
You may be watching the stock market surge and thinking about grabbing a piece for yourself. So how do you get started? How do you pick a winner? How do you allocate properly?
There are no one-size-fits-all answers to any of these questions. Yet they hold the key to the security of your retirement years.
You may have already missed the opportunity to use the buy low/sell high strategy for guaranteed profit. But there are still gains to be had.
You don't need a small fortune to start investing. Nor should you put it off until your student loan is paid, you've bought a car or a house, or any other goal you see as accomplishing first. Doing so is costly. You lose the power of compound interest.
Say, for example, you invest an amount as small as $1,000 every year. If you begin at age 25, you'll have $214,610 by the time you're 65. Wait until you're 30 to get started and you'll only have $148,913. We have an array of financial calculators on our website that illustrate how this can work for you.
If your company offers a 401(k) program, don't waste another minute reading this article. Enroll immediately. And if they offer a company match, enroll even quicker. Start small, if need be, with only $100 per month automatically deposited into your account from your paycheck. The important thing is to get started.
Pay raises are a thing of the past for a lot of folks. But when they do come around, add a piece of it to your monthly withholding.
Contributions to a 401(k) are on a pre-tax basis, making the effect on your take home pay smaller than your actual contribution. Someone in the 25% tax bracket would only take home $75 less per month while stashing $100 into their 401(k). Plus the company match.
Your 401(k) is a compilation of funds selected by the administrator to meet investor needs. You choose which ones you want in your portfolio. Your choice will be based on your individual situation and level of risk you're comfortable taking. Much like if you were investing through a broker managed IRA account.
We have a web page devoted to the different types of IRAs offered by GCF Bank, so we won't go into much detail here.
Both 401(k)s and IRAs were created by federal tax law as retirement savings vehicles for citizens. As such, both have strict guidelines for adherence. And penalties for not abiding to them. Withdrawing funds before age 59-1/2 unless under specific circumstances, and not taking the minimum distribution after reaching age 70, can be costly.
This includes cashing out your 401(k) when you change jobs. You'll face a hefty tax bill if the check is made payable to you rather than rollover into your new company's plan or an IRA.
These plans are simple to start and make continued contributions easy. But they are complex in tax consequences and technicalities. Your financial advisor, accountant, or tax professional is best equipped to answer questions as they apply to your individual situation.
Affordable Care Is Almost Here
March 23, 2010 may well become another day that goes down in infamy. On that date, President Obama signed the Patient Protection and Affordable Care Act, aka Obamacare.
It would take passing the Act to learn what was in the bill, as then-Speaker of the House Nancy Pelosi famously proclaimed. Yet here we are, on the brink of final enactment, and most of us still don't know what's in the bill. Or how it will effect us.
Certain provisions of the bill have been phased in since its signing, with full implementation slated for January 1, 2014. Except for the employer mandate, which has been postponed to allow those not exempted enough time to comply with regulations still being defined.
Health insurance experts wondered if the consumer portion would be delayed as well. As recently as two months ago, they felt there were still far too many unknowns to meet the target date. Yet here we are, a mere seven days before launch of the marketplace exchanges, and all systems are still moving ahead as scheduled.
It's generally agreed that the House of Representatives move to fund the government, but not Obamacare, was an exercise in futility. They were merely making a statement that they knew would be vetoed.
So we'll proceed here with the understanding that you will soon have to make a healthcare choice. And it's best that we have at least a basic understanding of what's at stake.
We keep hearing October 1 as the date the Affordable Care Act goes into effect. This isn't the case. The changes take effect on January 1, 2014 and include key provisions such as a ban on denying coverage for pre-existing conditions, no more annual limits on coverage and Medicaid expansion in those states that have elected to use this alternative.
What you can do beginning October 1 is select your coverage option from the marketplace exchange and enroll in your selected plan. Actual coverage does not begin until January 1.
We discussed how the exchanges will work, benefits of the Act and penalties for remaining uninsured in the June 25, 2013 edition of GCFlash.
New Jersey is among the 27 states that elected to use the federal marketplace exchange rather than creating their own. Residents of New Jersey, along with those of the 26 others, will be able to apply for coverage, compare plans and enroll by visiting Healthcare.gov. Specific plans and prices will be available during the open enrollment period beginning October 1.
You'll first need to setup an account and complete the online application. They'll want to know about your income, household size, current coverage and more. This helps them find which options meet your needs.
Then you'll choose from among four different plan levels: Bronze, Silver, Gold and Platinum. All plans offer the same set of benefits. The difference is what portion of your medical costs you're willing to pay out-of-pocket. It's merely different terminology for what we know as your deductible and co-payments. The higher your deductible, the lower your monthly premium.
There will also be a catastrophic plan available to those under 30 years old and to some with very low incomes.
After you choose your plan, enroll online. All at the same website.
Tax credits and subsidies are available to help offset premium cost to those with incomes between 100 and 400 percent of the federal poverty level. Individuals earning up to $45,960 annually up to a family of four earning $94,200 are eligible. The subsidies are sent directly to the insurance carrier, so those receiving them don't have to pay the full monthly premium up front and wait for reimbursement.
But you must purchase your coverage through the marketplace exchange to receive these credits. If you have coverage through your employer, or choose to continue your current individual plan, you do not qualify for either the tax credit or subsidy.
Each state will have navigators trained to help you understand your coverage options and help you enroll in a plan. If you currently work with an independent insurance agent or broker, they may be best able to help walk you through this process.
Use caution in selecting a representative. Already the cyberworld is abuzz with talk of this program being ripe for identity thieves. The opportunity for fraud exists in any situation where your private information is exchanged. This is certainly no different.
Only time will tell whether this piece of landmark legislation is the answer to America's healthcare crisis, or whether it creates a larger crisis of its own. Let's hope for the best, but prepare for the worst.
Tip of the Week
Enrolling in GCF Touch Banking mobile banking has just gotten easier! A new method to eliminate some of the registration hassles been put into place. Learn more.
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