20 Jun

Traditional vs. Roth IRAs

IRAs can be an important tool in your retirement savings belt, and whichever you choose to open could have a significant impact on how those accounts might grow.

IRAs, or Individual Retirement Accounts, are investment vehicles used to help save money for retirement. There are two different types of IRAs: traditional and Roth. Traditional IRAs, created in 1974, are owned by roughly 35.1 million U.S. households. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 24.9 million households.1

Both kinds of IRAs share many similarities, and yet, each is quite different. Let’s take a closer look.

Traditional IRA rules
Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into the retirement account. Distributions from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. For individuals covered by a retirement plan at work, the deduction for a traditional IRA in 2019 has been phased out for incomes between $103,000 and $123,000 for married couples filing jointly and between $64,000 and $74,000 for single filers.2,3

Roth IRA rules
Also, within certain limits, individuals can make contributions to a Roth IRA with after-tax dollars. To qualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Like a traditional IRA, contributions to a Roth IRA are limited based on income. For 2019, contributions to a Roth IRA are phased out between $193,000 and $203,000 for married couples filing jointly and between $122,000 and $137,000 for single filers.2,3

Contribution limits
In addition to contribution and distribution rules, there are limits on how much can be contributed to either IRA. In fact, these limits apply to any combination of IRAs; that is, workers cannot put more than $6,000 per year into their Roth and traditional IRAs combined. So, if a worker contributed $3,500 in a given year into a traditional IRA, contributions to a Roth IRA would be limited to $2,500 in that same year.4

Individuals who reach age 50 or older by the end of the tax year can qualify for annual “catch-up” contributions of up to $1,000. So, for these IRA owners, the 2019 IRA contribution limit is $7,000.4

Start planning
If you meet the income requirements, both traditional and Roth IRAs can play a part in your retirement plans. And once you’ve figured out which will work better for you, only one task remains: opening an account.

Provided by Jeff Hamm
Vice-President, Wealth Management
Jeff may be reached at 228-474-3427.

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 – https://www.ici.org/pdf/per23-10.pdf [12/17]
2 – https://www.marketwatch.com/story/gearing-up-for-retirement-make-sure-you-understand-your-tax-obligations-2018-06-14 [6/14/18]
3 – https://money.usnews.com/money/retirement/articles/new-401-k-and-ira-limits [11/12/18]
4 – https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits [11/2/18]

06 Jun

Navigator celebrates 80th Anniversary

Ingalls Employee Credit Union

Navigator Credit Union is celebrating eight decades of serving the Gulf Coast, and this month the celebration centers around a special day in June. It was June 24, 1939, when seven shipyard workers met and planned to form a credit union to offer co-workers opportunities for saving and for loans. Today, Navigator is Mississippi’s largest state-chartered credit union.

The Mutual Benefit Credit Union was the name chosen by the Ingalls Shipbuilding employees who were the founders and first members. The name was soon changed to Ingalls Employees Credit Union, and decades of growth and expansion of services followed. In 2003, the name Navigator Credit Union was chosen by its members to reflect the broader membership base their Credit Union had grown to serve.

Today, the full-service financial institution has 8 full-service Branches in Mississippi and 5 full-service Branches in Alabama. The Credit Union offers innovative financial services such as Save’N Up Debit Card Savings Program and Credit Builder Loans, as well as interest-bearing checking accounts, high yield savings plans, unlimited rewards credit cards, mortgage services, competitive vehicle loans, retirement planning and more.

A painting commissioned to commemorate Navigator’s 80 years, as “your family’s financial navigator” was unveiled at Navigator’s 80th Annual Shareholders’ Meeting in March and is being featured in anniversary festivities throughout the year. The painting, by a Jackson County (MS) artist, illustrates the unique communities the Credit Union serves. Daphne’s mossy oaks and piers; Mobile’s Middle Bay Lighthouse and historic homes; Pascagoula’s Round Island Lighthouse, bayou fishing camps, pine savannas and forests of Gautier, Hurley and Vancleave; Ocean Springs’ downtown marquee and the Port of Gulfport’s anchor are depicted. The state flowers of Mississippi and Alabama, the magnolia and camellia, are featured, and the Credit Union’s founding sponsor Ingalls Shipbuilding is at its center.

Please join Navigator Monday, June 24, 2019, from 9 a.m. to 5 p.m. at any Branch for a special “Birthday Party” celebration. Members will enjoy light refreshments and commemorative party favors while supplies last. You can find the Branch closest to you by clicking here.

A lot has changed since that muggy day along the east bank of the Pascagoula River, yet the belief “People Mean More than Money” is still fundamental to today’s Navigator Credit Union. Navigator continues to be a member-owned, not-for-profit financial institution working in the best interest of its Members.

13 Feb

Free Community Shred Day

Navigator Credit Union is committed to protecting your privacy. In keeping with our promise, we’re partnering with the Mississippi Attorney General’s Office for a free community shred day. But how do you know what to shred and what to keep? Navigator has your guide to how long you should keep certain documents.

Save forever
Keep documents related to major life events – birth, marriage, divorce and death. Lock securely:

  • Birth certificates or adoption papers
  • Social Security Cards
  • Citizenship papers or passports
  • Marriage or divorce decrees
  • Death certificates of family members

Also, keep auto titles and home deeds stored safety for as long as you own the property.

Tax records
Keep tax-related records for seven years. While IRS has three years to audit you, it has up to seven years under certain circumstances. A seven-year window should cover you in either event. The Federal Trade Commission suggests keeping tax returns forever.

Home improvement receipts
Keep these receipts until you sell our home, since certain expenses may reduce your capital gains tax.

Other records
According to the FTC, you can shred many other documents sooner than seven years. After paying credit card or utility bills, shred them immediately. Also shred sales receipts, unless related to warranties, taxes or insurance. After one year, shred bank statements, pay stubs and medical bills (unless you have an unresolved insurance dispute or these documents should be kept as tax records).

Free community shred day
The free shred event is set for Saturday, March 9, 2019 at Walmart located at 3615 Sangani Blvd., D’Iberville, Miss. It will be from 8 a.m. until noon or when the truck is full. Community members may bring up to three bags or boxes of documents to be shredded. It is on a first-come, first serve basis. The free shred day is not open to businesses.

Free shred day set for March 9, 2019 at Walmart in D'Iberville, Miss

22 Jan

Credit Score Quiz

How much do you know about your credit score? 

Your credit score is a rating lenders use when making decisions about approving loans and determining the terms and rates offered to you. Test your knowledge to see if you know what it takes to build good credit.

1. True or False: Credit scores range from 300 to 850.

2. True or False: A few late payments won’t affect your credit score.

3. True or False: Having multiple forms of debt generally helps your credit score.

4. True or False: Closing old credit card accounts will boost your score.

5. True or False: Paying off bad debt will erase it from your credit history.

6. True or False: Checking your credit report will hurt your score.

Answers

1. True. Credit scores are calculated between 300-850, and 700 or above is generally considered a good score.

2. False. Payment history is the most important factor in determining your credit score. Making on-time payments and keeping your level of debt at a reasonable level will help you improve your score. Late payments, on the other hand, will negatively affect your score.

3. True. Managing multiple forms of debt responsibly (e.g., a credit card, student loan and auto loan) helps build your credit history, and may boost your credit score if you make payments on time.

4. False. Part of your credit score is determined by the length of your credit history. If you close a credit account that you’ve been using for years, this average length of credit history may be shortened.

5. False. If you’ve missed payments or have a delinquent account in collections, paying off a debt does not remove it from your credit records. Most negative entries will, however, fall off your report in seven years.

6. False. Hard inquiries, such as applying for a credit card or a mortgage, could affect your score. Soft inquiries, like when you check your own score or order your free credit report, will not affect your score. You can check your credit reports at annualcreditreport.com. There are three main credit-reporting companies: TransUnion, Equifax and Experian, and you are allowed a free credit report from each every 12 months.

Your score

0-1 correct answers = Credit newbie — Taking the time to learn more about your credit score can help you get on track.

2-4 correct answers = Credit scholar — You’re on the right path, but can learn more to help boost your score.

5-6 correct answers = Credit star — You’ve got all the right information, now put it to work to improve your credit score!

Navigator Credit Union offers Members an innovative solution for establishing credit while saving for something special. With our Credit Builder Loan, you make regular monthly payments, Navigator reports your positive payment history to all three major credit bureaus – and you even earn interest on the money you’re saving while you build credit! Call or visit a full-service Branch today to learn about the Credit Builder Loan.

28 Jun

6 Expenses to Include in Your Homebuying Budget

When you buy a home, it’s important to look beyond the sale price and mortgage payment to set your budget.  First-time homebuyers are sometimes caught off guard by overlooked expenses, which can create an uncomfortable finance pinch. Be sure you consider these one-time and ongoing expenses:

  1. Home Inspection. Before you close on your home, you’ll want to have it thoroughly inspected by a professional. Your lender may even require it. For a few hundred dollars, an inspection can uncover potential trouble such as structural problems or asbestos. If problems are found, you may need to pay another expert to provide an assessment. A good inspector can also tell you what to expect in terms of…
  2. Home maintenance. Experts recommend setting aside 1 to 3 percent of the home’s purchase price for annual maintenance. You may need to buy lawn care equipment or replace the roof, furnace or water heater.
  3. Taxes and insurance. Property taxes and homeowners insurance aren’t always included in mortgage payment calculators.  Costs vary widely, depending on the value of your home and its location, but taxes and insurance together can easily total a few hundred dollars a month.
  4. Extra cash at closing.  Your lender should give you a detailed estimate of closing costs.  But beyond those, you may have to pay additional expenses, such as a prorated portion of property taxes or homeowners association fees that the seller has already paid.
  5. The move. Whether you hire professional movers for a few thousand dollars or rent a truck, buy boxes and recruit friends to help, moving costs money.
  6. Settling in.  You may have to pay utility connection fees when you move in, plus utility costs may be higher than you were used to as a renter.  You’ll probably want to replace the locks on all the doors.  And you may need new window coverings, rugs and furniture.

Find the Right Mortgage
The experienced mortgage specialist at Navigator Credit Union can help you understand the true costs of homeownership so you don’t encounter any unpleasant surprises.  We’ll help you find the right mortgage for your circumstances and budget. Contact a mortgage professional by calling 228-475-7300 or 800-344-3281, option #5; emailing Mortgage@navigatorcu.org ; or click here.