End of Year Resolutions – Part Three – “My Resolutions”

Welcome back.  All this talk about estate planning and long-term care insurance has me thinking about my real resolutions for the New Year.  If 2010 is anything like the last few years, most of the specific resolutions won’t survive the clean-up from New Year’s Eve.  But here are three for consideration.

            Be Prepared.   I’m not talking Boy Scouts and camping here. I need to think about the potential issues in my life and what I can control.  For example, after I get all those estate papers and insurance up to date, I need to make sure (1) I have provided details on what I have and where the documents are and (2) that the documents are in a safe but accessible place.

            I had to help settle a family estate once where various accounts were titled in a variety of ways.  Some were in one name only, others were joint owners with rights of survivorship, and still others were tenants in common. Clearing that up was almost painful – so making sure there is some consistency in our family accounts is part of the plan as well.

            Smell the roses (or the scent of your choice):  This time of year is more hectic than most, but in today’s society we’re pulled in a lot of different directions all the time. I mean to stop and look around once in a while; to appreciate what I have.  Because I live in Colorado, I am surrounded by absolutely spectacular scenery and a multitude of opportunities to enjoy it, either from a distance or right in the middle of forests and mountains.

            I am also fortunate to work for a credit union dedicated to the financial well-being of our members, with colleagues equally dedicated to that mission.  I need to take time to pause and recognize those parts of my life that aren’t sources of stress. Don’t we all?

            Say “Thank you” to someone every day:  So much of our routine involves people who contribute in small ways to our daily lives.  It may be the clerk at the corner store or a server at the cafeteria or restaurant where you have lunch.  How hard is it to express a sincere “Thank you” to them for what they contribute every day?

            Every day I am more and more aware of how much I depend on others to get everything done.  I can’t thank them enough.

            And  I can’t thank you enough for joining us during 2009 in this inaugural outing of EntTalk.  Have a happy, healthy, and prosperous New Year.  See you in 2010.

It’s your turn:  What resolutions are on your list for 2010.  What are you doing to make sure you follow up on them?

JM

End of Year Resolutions – Part Two: Long Term Care

Welcome back.  Continuing end-of-year thoughts on financial planning resolutions, I’m thinking about the challenge of long-term care. Depending on how young (and relatively immortal) you are, Long Term Care (or LTC for faster keying) may not have crossed your mind.  But here’s some food for thought, with help from the specialists in Ent’s Insurance Group.

To start, LTC refers to a wide range of medical, personal, and social services that may be needed because of a prolonged illness or disability.  Most people who need LTC are over age 65, but many working adults (18-64 years of age) receive such care and so do a small number of children.

LTC insurance to help pay the costs of care either at home or in a skilled care facility is not inexpensive.  It may, however, be a valuable investment if (1) you don’t have enough assets to pay the care costs on your own, (2) you want to preserve some of your assets for your estate, or (3) you have too many assets to qualify for state Medicaid support of the care.

Ent’s insurance specialists reminded me there is no real one-size-fits-all LTC policy.  Your specific needs, intentions, and situation will help determine what coverage you need.  For example, you might select a policy that provides for only nursing home care, only home care, or a combination.  You may want to provide coverage for up to three years, or maybe longer.  You may want to try to cover all of the costs or simply a part of your anticipated expenses.

Premiums can be higher as you get older.  The best time to buy a policy may be middle age – say 50-60.  The younger you are when you buy the policy the lower the premiums.  Of course, that means you’ll likely be paying premiums longer.

I suppose it’s like most insurance – you get it as part of responsible financial planning, and hope you never need to draw on it.  But when you need it, you’ll be glad you have it.

Before you buy a policy, be sure you understand all of its terms.  A qualified agent (like one of Ent’s experts) can guide you through the process.  Or you can start with the Ent podcast “Understanding Long Term Care Insurance” at www.ent.com/podcasts for a more detailed overview.

It’s your turn:  What do you think about the value of LTC insurance?  What would you tell others about it?

JM

End of Year Resolutions – Part One: My Estate Plan

Welcome back.  Last week’s discussion about retirement got me thinking about other aspects of financial planning, especially planning for transferring funds to the next generation.  It’s called “estate planning” and you don’t have to have a wad of money to take some steps to make things run smoothly.

            With the help of Ent’s Trust Services Department, here are a few thoughts.

            First, you need a will.  A will is a formal document that tells the court and your designated representative how to dispose of your assets – including real estate, cars, business holdings, money, and personal property.  If you die without a will, the court will appoint someone to serve as the representative. And the court-appointed representative will not likely have your wishes in mind. 

            Also, remember a will is a living document.  It needs to be revised whenever there is a major change in your life – marriage, children, grandchildren, retirement, etc.

            Next, a durable financial power of attorney is a simple, inexpensive and reliable way to arrange for someone (your “agent”) to handle your finances in case you are unable to do so.  You could become incapacitated by illness, an auto accident, or other event.

            A medical durable power of attorney lets you name a “health agent” to make medical care decisions consistent with your wishes, in case you cannot express those wishes directly to your doctor or family.  Usually, the document lets your agent have access to medical records and other information otherwise protected by the Health Information Portability and Accountability Act (HIPAA). 

            A living will complements the medical durable power of attorney by stating your specific wishes to refuse treatments that artificially prolong life.  This is also known as a medical care directive and usually directs your wishes about the use of feeding or hydration care as well as ventilators among other equipment.

            For more details, check out Ent’s podcast “Estate Planning 101: Four Important Documents Everyone Needs”, available at www.ent.com/podcasts. And be sure to contact a lawyer for these documents, which often depend on specific requirements established by your state to be valid. You may also find your FI* has a trust department (as Ent does) to help develop some of the documents or recommend a good resource.

As for me, one of my first resolutions for 2010 is to make sure I have these documents – and that they are up to date.  It’s just smart planning, and part of my responsibility to provide for my family.

It’s your turn:  What are you doing to help provide for a smooth transition of your estate, whatever its size?

JM

*FI – Financial Institution

The “R” Word – Retirement; Thoughts on life after work.

            Welcome back.  Recently, a member asked us to talk about “retirement” in EntTalk.  Wow!  Since whole books, and some consulting careers, have been built around the subject, the request is a bit daunting. 

Then I saw a newspaper cartoon titled “The Best Senior Moment.”  In the cartoon, a man stands in his doorway, entering his house carrying a briefcase, with his overcoat on.  His wife has paused in her housework as he says, “I went to work this morning, but couldn’t remember why, so I retired.”¹

If the decision is that easy, how hard can it be to at least reflect on the issue?  After all, I did retire once, from the US Air Force some years ago.  However (here come the disclaimers) I am not a licensed or credentialed retirement representative or investment specialist.  So keeping that in mind, a few thoughts.

1. It is never too early to begin thinking about retirement. The evidence suggests that all of us will depend increasingly on what we have saved – through regular savings, investments, and individual retirement accounts (IRAs) or 401k programs at work – for income in retirement.  Even if you’re 20-something, start today.  Chances are, your FI* has resources to help determine future needs or begin an automatic savings program pointed to that day, maybe still over a distant horizon.

 

1. Will you be retiring from something or retiring to something?  According to several experts, the distinction is important. It determines whether you regret leaving your work situation or you are eager in anticipation of a new phase in life.  One of my favorite resources for examining opportunities in retirement is the retirement specific edition of the “What Color is Your Parachute?” book series.

 

1. Will I have enough money to live on?  Here you need to talk to a professional.  While many FIs (including Ent) and investment companies have online calculators to help you determine your income needs against your resources, nothing substitutes for professional insight.  And to complement the online resources, some of those FIs (again, including Ent) have staff trained to provide you the advice you may need to be successful in both building for and living in retirement.

 

1. Have I provided enough for my family?  Now we’re in the area of true professional advice.  Estate planning, including wills, powers of attorney, and trust documents demand special knowledge if all of the papers are to meet the legal requirements of your particular state.  But these documents – properly executed and safely stored – will be a source of some peace of mind as you live in retirement.

I suppose the bottom line is to look at your own individual needs and resources as you consider questions about retiring from full-time employment.  There may be some hard work ahead just planning, budgeting, and thinking through the process.  Good luck.

It’s your turn:  What are your thoughts on retirement?  And if you’re retired, what advice would you offer?

JM

¹ NON SEQUITUR by Wiley, 2/18/2008, © Wiley Ink, Inc, 2008

*FI – Financial Institution

ATM and Card Safety – Protect yourself while you help the economy.

Welcome back.  In case you missed it, we have marked the “Black Friday” and “Cyber Monday” for 2009.  The holiday shopping season is officially under way.  If you survived, congratulations! 

            On the other hand, you could be like me – holding off a bit until more bargains show up (or you feel the real gift pressure as 12/25 gets closer).  In any case, this is also a season when scammers and other “bad folks” are about, taking advantage of us as we let down our guard during this “most wonderful time of the year.”

            So this week, with an assist from Ent’s Director of ATM and Card Services, here are a few tips to protect your cash and other information while shopping – in stores or on line.

• Never use an ATM unless you feel absolutely comfortable. It is probably advisable to avoid a machine in a poorly lit area or if you see suspicious folks around.  FI lobby machines are probably safe (and if it’s a credit union, look for a CO-OP Network logo to avoid service charges for CU members).
• Double check that no one is “shoulder surfing” or otherwise watching as you enter your PIN at the ATM or at a point of purchase.
• Monitor your account closely to identify any unauthorized charges and notify your FI immediately.  In most cases, you have to notify your card company within 30 days so use online account access to double check charges.  At a minimum, closely review your account statement for any unauthorized charges.
• Avoid counting your cash at the ATM or in your car (at a drive-up ATM).
• Review your receipt carefully before you sign it, save your copy to check against your statement.
• If you’ll be traveling to a new location, let your FI know so their fraud detection systems do not interfere with your card use on the road.

            For more tips, listen in to Ent’s “Using Credit Cards Wisely” podcast.  Simply log on to www.ent.com and look for the podcast link.  It’s the wise shopper who keeps personal and credit safety in mind while celebrating the holiday season.

It’s your turn:  How are you making sure your cards and identity are protected this holiday season?

JM

*FI – Financial Institution

Modern Credit Unions – They’re not your father’s credit union.

Welcome back.  Last week I took exception to a Denver Post article that overlooked credit unions as a source of lending for small businesses.  But it made me wonder why more people don’t even consider a credit union when they are looking for a personal, family, or business FI*.

            A few concerns come to mind.

            I have to meet certain requirements to be a member.  True.  Each credit union has a charter that specifies the criteria for becoming a member.  But many credit unions now serve whole industry groups and geographic areas.  For example, Wings Credit Union serves members of the aviation community; Ent is chartered to serve residents of certain Colorado counties.  Chances are, however, you can find a credit union you could join.

            Credit unions are small and don’t have all the services I need.  Better double check that.  Today’s credit unions can participate with partners to offer national and international service access through ATM and shared branch networks.  Many offer the most current Internet account access tools, including online bill pay and electronic alerts to help manage accounts. 

More and more, credit unions offer sophisticated tools for small to moderate-sized business to help manage their complex requirements – including payroll and credit transactions.  Others include investment, insurance, and trust services in their inventory of products and services.

Where can I learn more?  Check the websites of the National Credit Union Administration (www.ncua.gov) or the leading credit union trade organizations – the Credit Union National Association (www.cuna.org) or the National Association of Federal Credit Unions (www.nafcu.org).  Or check your favorite search engine for a link to a local credit union.

It isn’t rocket science.  And it is good financial common sense. According to a New York Post article,(Sunday, November 15)  New Yorkers are flocking to credit unions from banks  (article here – http://www.nypost.com/p/news/business/the_bank_revolt_of_Bil4tjTNh9q4M0GXFiahcP#ixzz0X3iUGVTS).   Maybe someone is paying attention!

It’s your turn:  What would you say to someone considering a credit union for their financial services?

JM

*FI – Financial Institution

Modern Credit Unions – An alternative to Big Banks?

Welcome back.  Sunday, when I opened my Denver Post, there on the front of the Business section was an article — “Too Big to Succeed” (http://www.denverpost.com/search/ci_13776987) — about big banks and their current lack of response to the needs of local small businesses.  The authors propose a return to the days of the “building and loan” of the post World War II (and “It’s a Wonderful Life”) era – locally-based lending institutions “that operate on a simple model with plain-language rules.” 

They overlook a resource that already exists with local focus, local ownership, and a commitment to the well-being of the local business community.  (Trumpets please) Your local credit union.

Much like the “building and loan” of yesterday, today’s credit union is owned by and managed to benefit its members.  Members can take out loans for personal or businesses purposes, confident that the credit union is working to assure their loan terms are in their best interest.

And the money earned from those loans returns to members in the form of better dividends, lower fees, and investment in new and improved services.

But today’s credit unions also occupy a unique position in the modern economy.  They were not part of the high risk lending and derivative investments that so dramatically affected the national financial system.  And credit unions did not need or receive any tax-payer assistance through Federal programs like TARP.

In fact, except for credit unions operating in some of the most severely affected areas of economic decline – California, Nevada, Arizona, and Florida – the community of credit unions as a whole is healthy and ready to meet the needs of individuals and small businesses alike.

Next time – More thoughts on why a modern credit union should be on your radar screen for financial services.

It’s your turn: Given the choice, would you rather join a proven, member-centered FI* or wait until some new organization was developed to try to address local lending need? 

JM

*FI – Financial Institution

What happened to “safe and sound”?

Welcome back.  I was thinking the other day about how events of the past 18 months have changed our priorities.  It’s not just our attention to finances and things like paying down debt or increasing savings.  There has been a major shift in what we look for in our financial service partners.

            Before “the great recession,” we tended to take the safety and sound operations of our preferred FI* pretty much for granted.  If it was up and running, we thought, it was probably a safe and sound place to park some money or take out a loan.  No more.

After all of the issues reported in the media, and troubled financial institutions, many of us now want to know about our own FI.  Is it safe?  Does it operate in a manner that assures it is strong and will be around to help meet my financial needs in the future.  How can you know?

First, look for publicly available financial information.  The National Credit Union Administration (www.ncua.gov) for credit unions and the Federal Deposit Insurance Corporation (www.fdic.gov) for FDIC-insured banks have some information. At NCUA, for example, you can obtain virtually all of the reported financial data – including key strength ratios – as of the latest calendar quarter.

Separately, consult one of the commercial rating companies –Bauer Financial or Veribanc – for an analysis of the strength of your current or prospective FI.  Their analyses closely reflect the same analyses performed by the respective industry examiners.

You might also talk with knowledgeable friends who understand what lies behind some of the reported figures.  At Ent, for example, our conservative operating philosophy influences how we lend and how we invest to help meet member service needs.  That philosophy isn’t the same as the numbers, but the numbers definitely reflect the underlying philosophy.

So safety and soundness is not taken for granted any more. I don’t think it will again for quite a while.

Now it’s your turn:  How important is the safety and soundness of your FI?  How do you assure yourself of its financial safety and sound business practices?

JM

 

*FI – Financial Institution

 

Low or no credit history? Tips for the First-Time Borrower

Welcome back. While the news is full of reports that Americans are paying down debt and saving more than in recent years, there are still times when you will need to borrow money.

And we’re not talking about covering a movie ticket (plus popcorn and a drink) or getting a full tank of gas. We’re talking about a need that really exceeds what your current cash flow can bear.

So, how can you qualify for a loan – especially if you don’t have much of a (or any) credit history?

This is a question we hear a lot – particularly from younger members as they start thinking about buying cars and homes.

• If you’re looking to borrow money – and you haven’t borrowed much before – look for special “first-time borrower” programs available at many financial institutions, including Ent. They may include an education element or requirement, but generally they are designed for people with low credit or no credit history.
• If you’re looking to build credit – knowing that you currently have low or no credit history – BALANCE Financial Fitness offers several thoughts on “How to Establish Credit.”

Borrowing and paying back on or ahead of schedule builds your credit history. For my first car loan I had to have my father co-sign on the loan. I made the payments and that became the foundation for my credit history. In other cases, your first credit card – again perhaps with a parent’s co-signature – can help be the first step in building a credit history. Or you can do like I did: marry someone who handles money better than you do.

It’s your turn: What are you doing to establish credit or build your credit history?

JM

PS: In response to a reader request, I am working with Ent staff on a future post on Retirement. Watch for future posts on that subject here at EntTalk.

But I wasn’t in Georgia this morning!

Welcome back.

It began simply enough.  Our debit card monitoring service detected an abnormal pattern in a sizable number of member debit card transactions.  It was sort of like: a transaction Sunday evening in Colorado Springs, one in Georgia Monday morning and another in Colorado about a half hour later.

Loss prevention specialists saw the pattern and immediately notified local police.  It looked like a data compromise at a local merchant, with likely impact on other financial institution customers. At the same time, our member service teams began notifying members whose card data was exposed to the compromise.  That effort – initially 1500 member accounts – kept service staff on the phone late Friday and all day Saturday of a 3-day weekend.

Then a member called a local TV station to report what they had heard from Ent.  So, for about 48 hours we were the only story on TV; and it played like we were the source of the problem, not helping to solve it.  That generated a lot of member inquiries and confusion about whether or not the compromise was an Ent data breach, and what were we doing about it.

By the end of the week, the merchant acknowledged it was the source of the data capture; police spokesmen revealed that other financial institutions were affected. 

Our member contact service staff worked diligently to help members through their concerns.

Importantly, we recognize the role member vigilance can play in helping minimize unauthorized or fraudulent use of plastic.  In a period when plastic is replacing cash as a means of buying things – whether in person or through the Internet – it is critical that individuals regularly monitor their accounts for unauthorized transactions.  This may sound like a broken record, but the most efficient way I know of to do that is with Online Banking, regularly reviewing your account’s transaction history.

Now it’s your turn:  What do you do to watch for unauthorized transactions on your debit or credit card?

 

JM