27 Jul

The New Inherited IRA Rule

Do you know what has changed for IRA beneficiaries?

NCU Wealth ManagementProvided by Jeffrey C. Hamm

New inherited IRA rules took effect on January 1, 2020. The Setting Every Community Up for Retirement Enhancement (SECURE) Act became law on that day, altering the regulations on inherited Individual Retirement Account (IRA) distributions.

The big change: the introduction of the 10-year rule for beneficiaries. Most people who inherit an IRA now have to empty that IRA of assets within ten years of the original owner’s death. You can do this as you wish; you can withdraw the whole IRA balance at once, or take incremental distributions on the way to meeting the 10-year deadline.1

Remember that tax rules constantly change. There is no guarantee that the tax treatment of Roth and Traditional IRAs will remain what it is now. This article is for informational purposes only. If you have inherited or expect to inherit a traditional or Roth IRA, be sure to consult a financial professional for real-world advice.

Are there exceptions to this rule? Yes. If the deceased IRA owner was your spouse, you can treat the inherited IRA like an IRA of your own. If it is a traditional IRA, you generally must take required minimum distributions (RMDs) from it once you reach age 72. The Internal Revenue Service (IRS) taxes those distributions as regular income, and if you take any distributions before age 59½, they may be subject to a 10% federal income tax penalty. If it is a Roth IRA, you aren’t required to take RMDs. (You may continue to contribute to a Traditional IRA past age 72 as long as you meet the earned-income requirement.)1

Certain non-spousal IRA beneficiaries still have the chance to “stretch” inherited IRA distributions over their remaining lifetimes, using Internal Revenue Service formulas (a choice available to most IRA beneficiaries before 2020). You may choose this option if you are less than ten years younger than the original IRA owner. You can also elect to do this if you meet the SECURE Act’s definition of a “disabled” or “chronically ill” individual (you have a life-altering physical or mental impairment or require extended care).1,2

Lastly, if a child inherits an IRA, they can take distributions based on the child’s life expectancy until the age of 18, at which point the aforementioned 10-year rule applies.1

If you are a Roth IRA beneficiary, be aware of the 5-year rule pertaining to Roth IRAs. If you inherit a Roth IRA that is less than five years old at the time of the original owner’s death, any earnings taken from it will count as taxable income. If the Roth IRA is more than five years old, you can take tax-free distributions from the earnings. Assets representing the original owner’s Roth IRA contributions can become tax-free distributions regardless of when the original owner opened the Roth IRA1

What’s the big takeaway from all this? Suppose you are relatively young and anticipate a large IRA inheritance, and that big IRA is a traditional IRA. In that case, you can anticipate greater income taxes during the 10-year window when you take those inherited IRA distributions.

By the way, the new rules do not apply to inherited IRAs whose initial owners died prior to 2020. If you are a beneficiary of such an IRA, then you may still attempt to “stretch” the inherited IRA assets according to IRS life expectancy formulas and take RMDs as required by the old rules.3

Jeff Hamm may be reached at 228-474-3427.

Learn more about NCU Wealth Management.

Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations

  1. NerdWallet, November 25, 2020
  2. FedWeek, March 3, 2020
  3. Forbes, October 28, 2020
14 Jul

Understanding the Child Tax Credit Expansion

Understanding the Child Tax Credit Expansion

The American Rescue Plan Act temporarily expanded the Child Tax Credit, or CTC, for the 2021 tax year. The IRS will pay half the total credit amount in advance monthly payments beginning in July. Those eligible for the credit can claim the other half when filing their 2021 income tax returns.

Navigator Members may have questions about what the Child Tax Credit expansion means for them. Here are answers to some frequently asked questions.

Will I receive advance CTC payments?

Navigator does not know who will receive advanced CTC payments or how much a Member will receive. The IRS will use your 2020 income tax return to determine if you are eligible and automatically enroll you for the advance payments.

Can I find out when I receive an advance CTC payment deposited to my Navigator account?

Members can see pending deposits on our free mobile app and/or be notified through e-Alerts.

When using the app, the pending deposit displays on the specific account to which the deposit will be posted. Using the mobile app to see pending deposits eliminates the need to call the Credit Union and avoids long hold times waiting for information that is right at your fingertips. It also allows you to see your available balance and displays any pending debits.

For more information on Navigator’s free mobile app, click here. To learn about setting up e-Alerts, click here.

What if my advance CTC payment is set to deposit to a closed account or one with a negative balance?

If a Member’s advance CTC payment is deposited into a charged off checking account or any closed account, it will be sent back to the U.S. Treasury with the notation: account closed. If the share account designated for the deposit has been charged-off and the Member has another open share, Navigator will deposit the payment into the open share. If the account designated for the deposit has a negative balance, Navigator will apply the payment to the negative balance.

What do I need to do to get my advance CTC payments?

Most families will begin receiving monthly payments without any additional action. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17.

People who need to file a 2020 federal income tax return may be able to prepare and file their federal income tax online using IRS Free File if their income is $72,000 or less.

People who don’t need to file a 2020 federal tax return can also use the Non-filer Sign-up Tool to register to receive the advance CTC payments, the Third Round Economic Impact Payment, and the Recovery Rebate Credit.

Do I have to have direct deposit to receive the advanced CTC payments?

The IRS will use data already in its systems to send the advanced Child Tax Credit payments. Taxpayers with direct deposit information on file will receive the payment that way. Those without current direct deposit information on file will receive a check or debit card in the mail.

Can I opt-out of the advanced CTC payments?

You can unenroll from the advanced payments and claim the full, increased amount on your 2021 income tax return. You can unenroll at any time. For more information, click here.

How do I get more information?

There’s a great deal of information on the IRS’s website.

Beware of fraud

Navigator is warning you of potential scams. Remember, you do not have to do anything to receive the advance CTC payments. The IRS will not email, text, call or direct-message anyone as initial contact. You should delete those messages unread. Clicking a link or responding could connect you with a scammer or infect your phone or computer with a virus.

Here are some other things to do instead:

  • Don’t respond to any communication from the IRS other than snail mail, and be sure it’s genuine. Real IRS correspondence has a notice (CP) or letter (LTR) number on either the top or the bottom right corner.
  • If your check will be mailed to you, go to com and sign up for Informed Delivery, which emails you photos of your mail before it is delivered. It’s free. When your check is expected, pick up your mail as quickly as possible or have someone do it for you.
  • If you believe your check was stolen from your mailbox, the IRS can trace the check and replace the money.
  • If someone tries to scam you out of some of the money or offers “help” in getting it sooner, you can report it to the FTC at reportfraud@ftc.gov.

Remember, Navigator and the IRS will never ask for your personal information such as social security or account numbers.

 

01 Jul

Break Free from High Rates and Extra Fees with a Credit Card from Your Credit Union

You’ve probably seen the ads or get the offers in your mailbox. Financial institutions – big and small – are vying for a credit card slot in your wallet. With bank fees and interest rates on the rise, a credit card from a credit union could make better financial sense than a traditional bank-issued card. Here’s why.

Lower fees

Credit unions are not-for-profit and owned by members. Because they don’t have to pay investors, members can expect fewer fees. Only about 10% of credit unions charge annual fees for credit cards, compared to 45% of banks.1 Maximum late payment fees are also 50% more at banks, on average.1 With foreign transaction fees, banks charge almost double what credit unions do.2 And most credit unions don’t charge anything for balance transfers, while you can expect to pay between 3% and 5% at most banks.3 All that’s true for the Navigator Platinum Rewards card which charges no annual fee, no balance transfer fee and no cash advance fees.

Lower rates

The annual percentage rate (APR) is another area where you could save by choosing a credit union. Credit card APRs are generally lower on credit union cards. Right now, new Navigator Platinum Rewards cardholders can qualify to take advantage of a limited-time offer of 4.99% APR on purchases for the first six months. When the introductory period is over, the rate reverts to the regular rate which is significantly lower than that offered by most banks and store credit cards. Regardless of the APR, remember you can avoid any interest charges by always paying your bills on time and in full.

More willing to work with bad credit

Credit unions are more likely to work with people who have a less-than-stellar credit history to find the best solution for them. Navigator’s Share Secured Visa® Card is an invaluable tool whether you’re looking to rebuild credit or establish credit. Your secured credit card is backed by a cash deposit. The deposit is usually equal to the credit limit to make purchases. You get the deposit back when you upgrade to a regular “unsecured” card or close the account in good standing. As you use the card, Navigator reports your activity to all three credit bureaus. Keep your balance relatively low and pay your bill on time every month, and you can begin to strengthen your credit. In addition, Navigator’s Platinum Reward card credit score requirements are set to allow more Members to qualify, even many who might not meet credit score requirements of other financial institutions.

Better customer service

Large banks have millions of customers from around the country. At a local credit union, you can expect a more personalized experience. If you have any questions or concerns regarding your credit card from a credit union, it’s easy to connect with the customer service team for valuable help tailored to your needs.

Take advantage of our limited-time offer!

From weekly grocery runs to monthly bills, our Navigator Platinum Rewards card makes your spending rewarding. And easy on your budget. For a limited time, we’re offering a low 4.99% introductory APR on purchases for six months! There’s also no annual fee, no balance transfer fee and no cash advance fees. Cardholders also earn unlimited uChoose® rewards. You can redeem the points for thousands of options – including cash back. Learn more about this limited-time offer by visiting navigatorcu.org/your-card.

1Source: Bankrate
2Source: CompareCards.
3Source: Credit Card Insider.
4Source: National Credit Union Administration.

APR=Annual Percentage Rate. Credit eligibility requirements apply. New cardholders pay a 4.99% introductory APR for the first 6 billing cycles from account opening. After that, the APR will be 10.90% and 12.90% based on creditworthiness. Offer subject to change without notice. See Visa agreement for uChoose Rewards® terms and conditions. uChoose Rewards® is a registered trademark of Fiserv Solutions, Inc. Visa® is a registered trademark of VISA Inc.

18 Jun

Cool Down Summer Spending

Cool Down Summer Spending

Lazy days and fun getaways are the hallmarks of summer. But unfortunately, our summer spending can leave our wallets empty come fall. We have some smart ways you can cool down common summer expenses.

Reduce Cooling Costs

Electricity usage tends to peak in the summer months mostly because of air conditioning. To reduce energy costs, replace your air filters often and turn up the thermostat by as little as four degrees. Get in the habit of using a ceiling fan to cool hot air as it rises. Keep blinds and curtains drawn to block out sunlight that can heat up your home.

Entertain the Kids for Less

From summer camp to swim lessons, activities for children can really add up. The good news? Warmer weather usually mean more festivals, outdoor concerts and community events, and this summer many venues and events are resuming pre-COVID schedules. Follow your local city or parks and recreation department social media accounts to keep up to date on free events. Some museums and learning centers also offer free or reduced admission days through the summer months. Consider using coupons and deals for entertainment. You can typically find discounts online on everything from bowling and mini-golf, to swimming, day trips and local restaurants. Plan a get-together with friends and their kids and you can save money thanks to group discounts.

Plan a Thrifty Summer Trip

Everyone enjoys big summer trips but they can be pricey. Cut costs by visiting more affordable tourist spots. Nearby state parks or local beaches are great choices. If you want to travel further away, consider visiting family. You’ll have a free place to stay and someone local to show you around.

If you need to take a break, Navigator can help with our vacation loan. Applying is easy. You can do it by phone by calling 800-344-3281, option 3, in-Branch or online. And if you want to take a break from regular loan payments, our anytime Skip-A-Pay may be right for you. Free up funds during the month of your choice, then use your cash for travel, entertainment, shopping or to just catch up. As a valued Member of Navigator Credit Union, you may be qualified to participate, and if you have more than one eligible loan, you can skip a payment on each one!

Eat at Home, Grill Out More Often

It’s no secret that eating out is considerably more expensive than eating at home – five times more on average. Consider meal planning to help reduce the time you spend in the kitchen and budget the use of your groceries. To change it up, take it outside and grill up some delicious food during the week. Grilling out helps eliminate using two energy-consuming appliances at once – your HVAC and the oven/stove. Have fun testing out different foods on the grill and enjoy relaxing summer evenings spent outside.

Conserve Fuel

Fuel prices inevitably increase in the summer. Even if you’re driving the same distance, it will cost more. If you can, cut back on driving. Carpool to work or use public transit. If you can’t avoid it, drive slower, use the recommended motor oil grade and keep your tires properly inflated to increase fuel efficiency.

Summer can be some of the most fun months of the year, and it doesn’t have to be the most expensive.

Terms and conditions apply. Visit navigatorcu.org for more details about personal vacation loans and the anytime Skip-A-Pay program.

12 May

Pullbacks, Corrections and Bear Markets

Pullbacks, Corrections and Bear Markets

What’s the difference? What do these terms mean for you?

Provided by Jeffrey C. Hamm

The COVID-19 outbreak has put tremendous pressure on stock prices, prompting some investors to blindly and indiscriminately sell positions at a time when the entire market is trending lower. Worried investors believe “this time it’s different.” When the market drops, some investors lose perspective that downtrends – and uptrends – are part of the investing cycle. When stock prices break lower, it’s a good time to review common terms that are used to describe the market’s downward momentum.1,2

Pullbacks.

A pullback represents the mildest form of a selloff in the markets. You might hear an investor or trader refer to a dip of 5% to 10% after a peak as a “pullback.”1

Corrections.

The next degree in severity is a “correction.” If a market or markets retreats 10% to 20% after a peak, you’re in correction territory. At this point, you’re likely on guard for the next tier.1

Bear Market.

In a bear market, the decline is 20% or more since the last peak.1

All this is normal.

Pullbacks, corrections and bear markets are a part of the investing cycle. When stock prices are trending lower, some investors can second-guess their risk tolerance. But periods of market volatility can be the worst time to consider portfolio decisions.

Pullbacks and corrections are relatively common and represent something that any investor may see in their financial life, from time to time – often, several times over the course of a decade. Bear markets are much rarer. What we are experiencing now represents the start of the ninth bear market since 1926. This bear market follows the longest bull market on record.1

How is this bear market going to affect me?

That’s a good question, but it’s something that you won’t fully understand in the here and now. The average bear market lasts 146 days for the Standard & Poor’s 500.2

A retirement strategy, formed with the help of a trusted financial professional, has market volatility factored in. As you continue your relationship with that professional, they will also be at your side to make any adjustments as needed and help you make any necessary decisions along the way. Their goal is to help you pursue your goals.

Jeff may be reached at 228-474-3427

Learn more about NCU Wealth Management.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.

Citations

  1. kiplinger.com/slideshow/investing/T018-S001-25-dividend-stocks-analysts-love-the-most-2019/index.html [3/10/20]
  2. marketwatch.com/story/the-dow-just-tumbled-into-a-bear-market-ending-the-longest-bull-market-run-in-historyheres-how-those-downturns-last-on-average-2020-03-11 [3/14/2020]
12 May

Take Advantage of Membership for the Best Loan Options, Rates

Take Advantage of Membership for the Best Loan Options, Rates

New car. New home. Starting a family. Dealing with an unexpected expense. No matter what life brings, your Credit Union is here to help you navigate the journey. We offer loans for the good times and the not so good times, and we’ll walk you through the lending process, so you feel informed and confident whatever your decision.

Just like banks, credit unions help people when they need or want to borrow money. Unlike a bank, a credit union is a not-for-profit institution owned by its members. This allows us to offer our Members better loan rates than most banks and other financial institutions.

Auto Loans

Don’t Pass By Our Great Rates

Especially during these challenging times, you want a vehicle you can rely on – and one you can afford. Financing or refinancing with Navigator is quick, easy and could save you hundreds of dollars. With interest rates now as low as 1.99% plus the same low rates for new and used cars, talking with Navigator lenders to get prequalified should be your first step when thinking about buying. Navigator auto loans feature flexible terms and no loan processing fees, plus Members can take advantage of affordable Guaranteed Asset Protection (GAP) and Extended Warranty coverages. Learn more about options for financing your next car purchase or refinancing your loan from another financial institution and even apply online by visiting our Auto Loans page.

Mortgages and Home Equity Loans

We’ll Help You Navigate Home

At Navigator we appreciate the importance of home and realize now more than ever, home is where the heart is. Our friendly, local team of mortgage specialists is ready to assist our Members with home loans of all kinds, whether you’re in the market for a new home, looking to refinance or wanting to take advantage of the equity in your existing home. Navigator Mortgage Services offer highly competitive rates, free prequalification, flexible loan options and in-house servicing for most 30-year mortgages. There’s even a limited time special offer now available of 50% off loan origination fees!

Whether you’re a first-time buyer or looking for a reminder, our FREE Homebuyers Guide can help answer any questions you may have about all the steps in the process of finding and buying the home that’s right for you. Ready to start your home buying journey? We’re ready to help! Give us a call at 800-344-3281, option 5, to set up a free, no-obligation consultation today. Or visit navigatorcu.org/mortgage to get more information and even apply online.

Navigator Platinum Rewards Card

Skip the Fees, Earn the Rewards

The Navigator Platinum Rewards card is a financial tool that works for you in more ways than one. You pay no annual fee, no balance transfer fees and no cash advance fees. Plus, you’ll enjoy a low monthly interest rate and generous credit limits. And as a Navigator Platinum Rewards cardholder, you are eligible to participate in the free uChoose Rewards® program. With uChoose Rewards, you earn a point for every $1 spent, so you can get rewards faster! Then redeem your points for thousands of options including computers, TVs, rental cars, gift cards, even cash – the choice is yours!

Personal Loans

Loans as Unique as You Are

Whether it’s an unplanned medical cost, emergency car repair or maybe you’d like to consolidate your debt into one manageable payment, there are lots of reasons to consider a personal loan from Navigator. We want to help you achieve a dream or deal with that unexpected bump in the road by extending personal credit with low rates and flexible terms. To look into personal loan options to meet your particular need, click here. Our personal loans offer quick, local decisions, and the process can be done completely online without stepping foot in a Branch. Apply online today.

As a not-for-profit credit union, Navigator is here to serve our Members, not Wall Street investors. That means we can provide you with a full range of financial products and services, with better rates, fewer fees and more flexibility than a traditional bank can provide. Start enjoying the benefits of membership with a Navigator loan for wherever you are on life’s journey.

APR = Annual Percentage Rate. The Annual Percentage Rate is the advertised rate and can vary based on creditworthiness, age of vehicle and term of the loan. Your rate can be higher depending on your credit performance. Rates are subject to change without notice. NMLS# 646402. Equal housing opportunity lender. For current mortgage rate information, visit navigatorcu.org/mortgage. Terms up to 30 years available. Subject to credit approval and membership eligibility. Federally insured by NCUA.

20 Apr

Common Fraud Schemes Related to COVID-19

Common Fraud Schemes Related To COVID-19

Navigator Credit Union wants you to be safe during the COVID-19 pandemic, and that includes helping to keep you safe from fraudsters. We want to make you aware of some of the common fraud schemes now being reported by the Federal Bureau of Investigation (FBI).

Government Impersonators
According to the FBI, one of the most prevalent schemes is government impersonators. Criminals are reaching out to people through social media, emails or phone calls pretending to be representing government agencies. In some cases, they’re even going door-to-door to try to convince people to give them money for COVID-19 testing, financial relief or medical equipment. It’s important to know the government will not reach out to you in these ways. If someone reaches out to you directly and says they’re from the government helping you with virus-related issues, it’s likely a scam.

Fraudulent Cures or Medical Equipment
The FBI says it’s most concerned about fake cures or treatments for the virus. These cures can be dangerous to your health and could even be fatal. You should never accept a medical treatment or virus test from anyone other than your doctor, pharmacist or local health department.

Work-from-Home Fraud
People who are at home and out of work are vulnerable to work-from-home scams. If someone you don’t know contacts you and wants you to urgently pay them in return for a job, there’s a good chance it is a scam. Legitimate employers will not ask you to pay them in order to get work.

Investment Fraud

One of the most lucrative schemes being encountered by the agency involves criminals offering you an opportunity to invest in a cure or treatment for the virus. The purpose of these get-rich quick schemes is simply to defraud the investor. Any offer like this should be treated with extreme skepticism.

Ways to protect yourself
Use the utmost caution in online communication. When it comes to emails, always verify who the sender is – and look closely; criminals will sometimes change just one letter in an email address to make it look like it comes from someone you know. Be very wary of attachments or links; hover your mouse over a link before clicking to see where it’s sending you.

In general, the wisest and safest approach is to be suspicious of anyone offering you something that’s “too good to be true” or is a secret investment opportunity or medical advice. Seek out legitimate sources of information on your own without relying on the claims which come from unfamiliar sources.

16 Apr

Think twice before taking social media quizzes

While they’re practicing social distancing as part of an effort to slow the spread of COVID-19, many people are turning to social media to stay connected and pass the time. Navigator Credit Union wants to warn of an old trick identity thieves are deploying to get your information.

Navigator, along with the Better Business Bureau, warns you to think twice before taking part in social media challenges and quizzes. These are those posts which ask, “What was your favorite teacher’s name? Who was your first grade teacher? Who was your childhood best friend? What was your first car?” and similar questions.

If these questions sound familiar, they should! These are the many of the same questions you are asked as security questions when setting up bank and credit card accounts. When you answer these questions and post your responses online, you may not realize you are also giving the answers needed to get past the security questions set up to protect your private information and money.

Although many of these posts are simply meant for fun, hackers are also setting up these “get to know you” posts as a way to steal your information. They then can steal your online identity, build a profile of you and use the information you inadvertently handed them in order to hack your accounts or open lines of credit in your name.

Here are some tips to avoid social media scams:

  • Be skeptical: Before you take a quiz, see if you can figure out who created it. Is it a brand you trust? Just because something appears to be fun and innocent, doesn’t mean there isn’t an inherent risk.
  • Adjust privacy settings: Review your social media account’s privacy settings and be strict about what information you share - and be mindful of who you are sharing it with.
  • Remove personal details from your profile: Don’t share information like your phone number or home address on social media accounts.
  • Don’t share friends’ information: Many quizzes, games and apps ask for access to your friends list and information. Do not grant permissions without asking your friends first! While you are choosing to give access to your information, they aren’t – and you could be putting them at risk, too.
  • Monitor Friend Requests. Don't accept friend requests from people you don’t know. Also be wary of a second friend request from someone you are already connected with; the second profile may be an imposter trying to access your data and your Friends list.

Of course, not all of the quizzes, posts and games are scams. However it is best to remain vigilant and refrain for such activities as there is no way to tell which ones may have been created by scammers. When it comes to this seemingly innocent “fun,” it is truly better to be safe than sorry.

03 Apr

IRS warns of economic impact payment scams

Navigator Credit Union is committed to helping you protect your privacy. As the COVID-19 pandemic takes a toll on people’s pocketbooks, your finances could face other threats as well.

Experts are warning of a rise in scams. You’re advised to be on the lookout for an increase in calls and email phishing attempts. That’s not all. Tech savvy fraudsters may also use text messages, websites and social media to request money or get your personal information.

The Internal Revenue Service says scammers may:

  • Emphasize the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
  • Ask you to sign over their economic impact payment check to them.
  • Ask by phone, email, text or social media for verification of personal and/or banking information saying the information is needed to receive or speed up your economic impact payment.
  • Suggest they can work on your behalf to get a tax refund or economic impact payment faster. This scam may be conducted by social media but it could even be done in person.
  • Mail you a bogus check, perhaps in an odd amount, and then tell you to call a number or verify information online in order to cash it.

Navigator wants to remind Members it is extremely important you do not provide personal or financial information, including social security number or bank account information, to an unknown source. If you think you’ve been contacted by a scammer, you’re encouraged to report it to the Federal Trade Commission.

31 Mar

Long-established retirement account rules change

The Setting Every Community Up for Retirement Enhancement (SECURE) Act is now law. With it, comes some of the biggest changes to retirement savings law in recent years. While the new rules don’t appear to amount to a massive upheaval, the SECURE Act will require a change in strategy for many Americans. For others, it may reveal new opportunities.

Limits on Stretch IRAs.

The legislation “modifies” the required minimum distribution rules in regard to defined contribution plans and Individual Retirement Account (IRA) balances upon the death of the account owner. Under the new rules, distributions to non-spouse beneficiaries are generally required to be distributed by the end of the 10th calendar year following the year of the account owner’s death.1

It’s important to highlight that the new rule does not require the non-spouse beneficiary to take withdrawals during the 10-year period. But all the money must be withdrawn by the end of the 10th calendar year following the inheritance.

A surviving spouse of the IRA owner, disabled or chronically ill individuals, individuals who are not more than 10 years younger than the IRA owner and child of the IRA owner who has not reached the age of majority may have other minimum distribution requirements.

Let’s say that a person has a hypothetical $1 million IRA. Under the new law, your non-spouse beneficiary may want to consider taking at least $100,000 a year for 10 years regardless of their age. For example, say you are leaving your IRA to a 50-year-old child. They must take all the money from the IRA by the time they reach age 61. Prior to the rule change, a 50-year-old child could “stretch” the money over their expected lifetime, or roughly 30 more years.

IRA Contributions and Distributions.

Another major change is the removal of the age limit for traditional IRA contributions. Before the SECURE Act, you were required to stop making contributions at age 70½. Now, you can continue to make contributions as long as you meet the earned-income requirement.2

Also, as part of the Act, you are mandated to begin taking required minimum distributions (RMDs) from a traditional IRA at age 72, an increase from the prior 70½. Allowing money to remain in a tax-deferred account for an additional 18 months (before needing to take an RMD) may alter some previous projections of your retirement income.2

The SECURE Act’s rule change for RMDs only affects Americans turning 70½ in 2020. For these taxpayers, RMDs will become mandatory at age 72. If you meet this criterion, your first RMD won’t be necessary until April 1 of the year after you reach 72.2

Multiple Employer Retirement Plans for Small Business.

In terms of wide-ranging potential, the SECURE Act may offer its biggest change in the realm of multi-employer retirement plans. Previously, multiple employer plans were only open to employers within the same field or sharing some other “common characteristics.” Now, small businesses have the opportunity to buy into larger plans alongside other small businesses, without the prior limitations. This opens small businesses to a much wider field of options.1

Another big change for small business employer plans comes for part-time employees. Before the SECURE Act, these retirement plans were not offered to employees who worked fewer than 1,000 hours in a year. Now, the door is open for employees who have either worked 1,000 hours in the space of one full year or to those who have worked at least 500 hours per year for three consecutive years.2

While the SECURE Act represents some of the most significant changes we have seen to the laws governing financial saving for retirement, it’s important to remember that these changes have been anticipated for a while now. If you have questions or concerns, reach out to your trusted financial professional.

Jeff Hamm may be reached at 228-474-3427.

Learn more about NCU Wealth Management.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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Citations.

  1. waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/SECURE%20Act%20section%20by%20section.pdf [12/25/19]
  2. marketwatch.com/story/with-president-trumps-signature-the-secure-act-is-passed-here-are-the-most-important-things-to-know-2019-12-21 [12/25/19]