12 Steps to Financial Wellness:

Step 10- Plan for Retirement

It’s never too early – or too late – to start planning for your retirement. However, the more time you allow for your savings to grow, the bigger the nest egg you’ll have when it’s time to cash in.

 

Here’s how to get started on planning your retirement.

 

Set a target number

First, determine how much you’ll need to have saved to live comfortably and independently throughout your retirement. Experts advise taking your current living expenses and multiplying the number by 400 to identify the amount you’ll need to sustain yourself based on a 4% return.

 

Choose your retirement account strategy

Next, you’ll need to select a place to keep your retirement savings. There are many options to consider, some of which you may already have if you are, or have been, employed. Here’s a quick review of the two most common retirement accounts:

 

1. 401(k)

If you’re employed, you likely have a 401(k) that’s working toward collecting money for your retirement. Take advantage of this retirement tool by maximizing your contributions. Also, many employers match a portion of (or all) contributions you make, which is basically free money, to help your retirement savings grow tax-deferred.

 

2. IRA

There are two popular kinds of Individual Retirement Plans (IRA): conventional IRAs and Roth IRAs. A conventional IRA will let your money grow, tax-deferred, but withdrawals are taxable. A Roth IRA does not feature tax-deferred growth, but qualified withdrawals are not taxed. Like a 401(k), some employers match a portion of (or all) contributions. But, there are federal limits on how much money you are allowed to add to your IRA each year.

 

The table below shows a brief summary of the pros and cons of each retirement vehicle for easy comparison.

 

Features	401(k)	IRA	Roth IRA
Matching Funds	Yes	No	No
Tax-Deductible	Yes	Depends on income, tax-filing status and other factors	No
Tax-Deferred Growth	Yes	Yes	No
Taxable Withdrawals	Yes	Yes	No
Maximum Yearly Contribution (2022)	$20,500	$6,000	$6,000
Maximum Yearly Contribution Age 50+ (2022)	$27,000	$7,000	$7,000

 

After you’ve selected your retirement fund, you’ll also need to choose somewhere to invest. With a bit of work and a lot of planning, you’ll have your future secured in the best way possible.

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

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Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Home Equity Loan vs. HELOC: What’s the Difference?

One of the biggest perks of homeownership is the ability to build equity over time. You can use that equity to secure low-cost funds in the form of a second mortgage—either a one-time loan or a home equity line of credit (HELOC).

Home equity loans and HELOCs use the equity in your home—that is, the difference between your home’s value and your mortgage balance—as collateral. As the loans are secured against the equity value of your home, home equity loans offer extremely competitive interest rates—usually close to those of first mortgages. Compared with unsecured borrowing sources, such as credit cards, you’ll be paying less in financing fees for the same loan amount.

Home Equity Loans

A home equity loan, or second mortgage,  comes as a lump sum of cash. It’s an option if you need the money for a one-time expense, such as a wedding or a kitchen renovation. These loans usually offer fixed rates, so you know precisely what your monthly payments will be when you take one out. Learn about Second Mortgages here.

We offer a fixed rate option on our second mortgages with a maximum term of fifteen (15) years.
Several advantages of working with us on your loan:

• Low closing cost
• No pre-payment penalty
• Retained servicing (excludes 30 year fixed)
• Variety of payment options
• Cash-out refinances on specific mortgage plans

A HELOC Is…

A HELOC is a line of credit that revolves – similar to a credit card – and can be used for large expenses, unexpected expenses, home remodeling, debt consolidation(1) or the like. Like a credit card, each time you repay some or all of the money used from the HELOC, your credit line is correspondingly replenished.

A HELOC is a secured loan in that you are borrowing against the equity that has been built in your house. Typically, lenders will let you borrow from 80 to 95 percent of your home’s equity.

When you obtain a HELOC, you are given a draw period, or length of time during which your line of credit will stay open. Draw times typically average 10 years. After the draw period is over, you enter into the repayment period, which for qualified members, we offer a great rate with a maximum term of fifteen (15) years.

AGCU offers HELOC’s in the following Missouri counties: Greene, Dade, Polk, Dallas, Webster, Christian, Stone, Lawrence, and Taney.

A HELOC Works by…

Borrowers can apply for HELOCs through AGCU’s Home Loan Center. The lender will assess the borrower’s home LTV (loan-to-value) ratio, as well as their income, credit score and other debt. Like a home loan, HELOCs – once approved – include closing costs.  A Mortgage and HELOC document checklist is available here.

HELOCs typically have a variable rate which, in large part, will be based on the current prime rate. This means that when rates rise – as they have been lately – the rate on a HELOC will rise accordingly. Even so, the rate on a HELOC is usually lower than credit card rates.

Once the HELOC has been approved, the borrower begins the draw period. During this time, any money borrowed from the line of credit is repaid each month by interest-only payments, which may mean a lower monthly payment. When the draw period is over, the borrower moves to the repayment period, during which time the monthly payment begins to include principal plus interest for any money borrowed, meaning the monthly payment may increase.

The Phases of HELOCs

Most home equity credit lines have two phases. First, a draw period, often 10 years, during which you can access your available credit as you choose. Typically, HELOC contracts only require small, interest-only payments during the draw period, though you may have the option to pay extra and have it go toward the principal.

After the draw period ends, you can sometimes ask for an extension. Otherwise, the loan enters the repayment phase. From here on out, you can no longer access additional funds, and you make regular principal-plus-interest payments until the balance disappears. Most lenders have a 20-year repayment period after a 10-year draw period. During the repayment period, you must repay all the money you’ve borrowed, plus interest at a contracted rate. Some lenders may offer borrowers different types of repayment options for the repayment period.

AGCU Home Loan Center

Every borrower is different, and we offer a variety of products to meet your requirements. We make the mortgage process simple and straightforward by offering the latest in financial tools that enable you to make sound financial choices. Whatever your real estate lending needs are, AGCU is here to help you navigate the process. Call our team of mortgage professionals at 866-508-2428(AGCU) or email us for more information.

KEY TAKEAWAYS

• Home equity can be a great source of value for homeowners to access cash for renovations, large purchases, or alternative debt repayment.
• Home equity loans and lines of credit are secured against the value of your home equity, so lenders may be willing to offer rates that are lower than they do for most other types of personal loans.
• A home equity loan comes as a lump sum of cash, often with a fixed interest rate.
• A home equity line of credit is a revolving source of funds, much like a credit card, that you can access as you choose.
• Learn more about Home Equity Loans or Lines of Credit 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Your credit score is vital to your financial health. This number measures your money management skills, credit capacity, and fiscal responsibility. An excellent credit score can open the door to large loans with better interest rates, as well as employment opportunities and more.

 

Let’s explore the best ways to build and maintain an excellent credit score.

 

Have several active credit cards

Building and preserving a healthy credit score requires owning a few cards and keeping them active. If you’re just starting out, consider signing up for a beginner’s card, which generally features easy eligibility requirements and very little available credit. Otherwise, have a minimum of three open cards that you use wisely on a regular basis. AGCU offers a variety of personal credit cards, including Max Cash Preferred, Real Rewards, Platinum, and Secured Card. Pick the card best suited for your needs!

 

Work on paying down debt

First, choose your debt-crushing method: The snowball method works by putting all available funds toward paying off the lowest debt first and then the next smallest, until all debts are paid off. The avalanche method works the same way but focuses on paying off the highest interest rate debts in descending order until all are paid off. With the snowball method, you’ll get faster results but may end up paying more in overall interest payments on all debts. Showing the credit bureaus that you’re on track to pay off your debt can do wonders for your score.

Pay your bills on time

Paying credit card bills when, or before, they’re due is a major factor in your score. Continually carrying an outstanding balance and/or owing lots of interest shows that you can’t be counted on to repay loans responsibly. Remember, you can set up automatic monthly payments with AGCU Bill Pay, so you’re always on time.

 

Bring down your credit utilization ratio

Another crucial factor in your score is your credit utilization ratio. This refers to the amount of available credit you use. Keep your utilization under 30% or even 10% if you can. To that end, make sure you’re using just a bit of your available credit each month. In addition, consider accepting offers for increased credit – as long as you know you won’t rack up huge bills simply because of having all that credit.

 

Use the tips outlined here to build and maintain a great score.

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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12 Steps to Financial Wellness:

Step 11- Start Investing

The world of investing can be confusing, especially for a first-timer. No worries, though; AGCU can help! Here’s how to start investing in five easy steps.

 

1.  Define your tolerance for risk

If you’re investing, be prepared for potential losses, because there are no sure things. But how much loss can you take? Your risk tolerance will vary according to the time horizon you’re working with, the amount of money you can afford to lose and your objectives.

 

2.  Define your investment goals

Why are you investing this money? Do you hope to save enough money for a down payment, or to fund your retirement? Or, are you simply looking for a way to grow your money? Identifying your investment goals will help you choose your investment vehicles and the amount of money you’re comfortable investing.

 

3.  Determine your investing style

Next, you’ll need to find an investing style that suits your personality and investing goals. Here are your basic choices:

• Active management–personally managing your investments. This can be a great choice for an investor who is confident in their knowledge of the market.
• Broker/financial advisor–allowing an outsider to manage your investments and make decisions regarding your portfolio.
• Robo-advisor–an automated option that typically costs less than a traditional broker and works with your goals, risk tolerance level and other personal details.

 

4. Choose your investment account

You’re ready to choose your investments! Here are some popular first-time investments:

• Bonds–a loan to a company or government entity which agrees to pay you back in a specified amount of years. You’ll get modest dividends until the bond matures. Bonds are low-risk, but offer lower long-term returns.
• Exchange traded funds (ETFs)–individual investments bundled together and traded throughout the day, like a stock. Share prices are relatively low.
• Mutual funds–professionally managed pools of investor funds that focus their investments in different markets. Mutual funds are inherently diversified, making them a good choice for beginner investors.
• Stocks–a single share or a few shares in a specific company. Be sure to research your chosen company/ies carefully.

 

5. Learn to diversify and reduce risk

Monitor and adjust your portfolio on a regular basis to keep it diversified and help minimize the risk of loss. Follow these steps to help you get started investing with more confidence.

If you’re ready to start investing or would like some more advice, Reach out to our good friends at AGFinancial

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Scratch and Save is back August 1st!

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You could save up to 2% on your next auto, motorcycle, RV, or watercraft loan.* This includes NEW & USED vehicles.

Here are the ways you can get your discount:

• Postcards will be mailed to members at the beginning of August. Scratch off the circular shaded area on the back of the postcard to discover your discount.
• Log in to Online Banking and click the banner at the top of the homepage to reveal your discount. You can even click again once per day to try for a bigger discount! Online Banking will keep track of the best discount you reveal. Log in here.
• Visit one of our branches to get a scratch-off postcard from a loan officer.

Do you have a vehicle loan with another lender? See if Mystery Savings can save you money by refinancing your loan with AGCU!

Apply online or contact a loan officer at 866-508-2428.

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*Minimum interest rate is 2.24% APR up to 72 months and 3.24% APR up to 84 months. APR = Annual Percentage Rate. The maximum loan term is 84 months. Member must be in good standing. Subject to credit approval and the credit union’s eligibility requirements. No refinancing on existing AGCU loans. Offer valid 8/1/2022 – 9/30/2022. Not valid with any other offer. See credit union for complete details.

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU. Learn More About Banking with a Purpose

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Beware Malware Scams

Oh no! Your computer’s been hacked, and it now has an awful virus. But there’s good news; a helpful caller reached out to you to offer their expert help. The caller may even be a representative of the Federal Trade Commission (FTC), or another reputable company, and they’re happy to help restore your device to safety. Just do as they say, and all will be right again.

Unfortunately, it won’t: If you do follow the caller’s instructions, you’ll be lured into a scam.

Malware scams are particularly malicious, as they exploit the prevalence of scams and hackers to trick innocent victims into losing their information and money. Here’s what you need to know about malware scams and how to avoid them.

How these scams play out

Malware scams, also known as tech support scams, begin with a phone call. A scammer reaches out to an individual and informs them that their computer has been hacked. The caller claims the alleged hacker gained access to the victim’s device and can do all kinds of damage. However, the caller, posing as tech support, says they can help remove any malware that’s supposedly installed. The bogus rep gives the victim instructions for removing the malware, possibly even giving the caller access to their device. Unfortunately, though, if the victim follows these directions, they’ll actually be installing malware on their computer.

Red flags

Avoid malware scams by looking out for these signs:

• An alleged rep of a tech support company, or the FTC, has called you without you reaching out to them first.
• The “tech support rep” asks you to provide them with remote access to your device so they can allegedly remove any malware that has been installed.
• The caller claims that serious damage has already been done to your computer even though everything looks untouched from your observations.
• The caller urges you to act immediately or risk causing further damage to your device.
• The caller asks you to enter your credit card information or checking account details to pay them for their service. Alternatively, they’ll ask to be paid via a prepaid gift card.

If you’ve been targeted

If you believe you’ve been targeted by a malware scam, take these steps to protect your money, and your device, from harm.

First, do not engage with the caller. Hang up as soon as possible and block the number. Next, if you’ve started entering information into your computer as per the caller’s instructions, close your device immediately. If you believe you have already given the scammer access to your device, you may want to consult a genuine tech support expert to remove any malware that may have been installed. In addition, consider canceling any credit cards you may have shared with the scammer or which were stored on browsers and apps on the device. Also, consider placing a credit freeze on your name to prevent any loans or new lines of credit the scammer may take out in your name. Finally, report the scam to the FTC.

Signs your device has been infected

A computer may be infected with malware and still operate almost normally. Here’s how to tell if your computer’s been infected:

If you notice any of these signs on your computer, it’s best to bring it to a tech support expert who can scan it for malware. If malware is found, follow the steps outlined above to protect your money and your information from further harm.

Don’t get caught in a malware scam! Stay alert and stay safe.

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Step 6 : Pay it Forward

 

There’s so much good you can do with the money you’ve been blessed to have. There’s also a lot of good you can do with your time, talents, and possessions. Let’s explore some ways you can make the world better by paying it forward.

1. Donate funds to your favorite cause

The classic and simplest way to pay it forward is by supporting a charity or two that speaks to your heart. Make a donation that fits your budget to help make a difference. Be sure to verify the authenticity of the organization on a charity-vetting site, like Charity Navigator or CharityWatch. Don’t forget to save your receipt so you can claim a tax deduction.

2. Commit to do one random act of kindness each day

Kindness doesn’t have to be big, loud, or costly to make a difference. Small things can have a big impact on someone’s day. You can offer to make a coffee for your coworker, feed a parking meter that’s about to run out, remove a branch or rock from a busy thoroughfare or let someone go ahead of you at a checkout counter.

3. Write thank you letters

When was the last time you thanked your child’s teacher, your parents or your postal carrier? Pick up a set of thank you cards, and spend 20 minutes writing thank you letters. Your letters may be cherished by the recipients for many months or years to come.

4. Donate your time

Unfortunately, there are many people suffering from various hardships. With just a small donation of your time, you can help alleviate some of their suffering. Volunteer at a soup kitchen, help bring cheer to hospitals, offer to babysit for a couple who is going through hard times so they can have a night out or visit a lonely person. You can brighten someone’s day simply with your presence!

There are so many ways to pay it forward and make the world a better place. And when you give to others, you’re really giving to yourself by learning to be a better, kinder person.
The more you use AGCU for your day-to-day banking needs, the more you help support worthy causes – both locally and worldwide. We donate 10% of our annual earnings to support churches and ministries, educational scholarships and programs, and humanitarian efforts. Every day, we provide financial services to people across the United States and missionaries in 190 countries around the world.

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Living a life of financial wellness means being happy with a lifestyle that’s within your means, but doesn’t leave you feeling like you’re lacking. At the same time, financial wellness means money choices are governed by discipline and not by emotion. So how do you strike a balance between the two?

Here’s how to indulge responsibly.

 

Live with a budget

To do this, track your spending for three months. Next, make a list of all your expenses and list your income in a parallel column. Tally up your totals and assign a realistic dollar amount to each expense. Going forward, be sure to only spend within the allocated amount for each expense category.

Leave room in your budget for “just for fun” purchases

As you work on building a budget, leave room for the occasional treat. The exact amount will vary by income level, lifestyle and personal choice. However, wisely choose an amount you can easily afford without feeling deprived.

Review your savings

Before giving yourself permission to indulge, make sure you’re setting aside some of your monthly income to savings. Ideally, short-term savings should be enough to keep you afloat for 3-6 months if you have no source of income. Long-term savings should be sufficient to support your retirement and any long-term savings goal you may have.

 

Choose your “treats”

Everyone’s got a personal vice or three. Take a look at where your non-discretionary money went over the last month and highlight the more expensive impulse buys. Hold these purchases up to these questions:

• Did this purchase bring me happiness or positive energy the day I bought it? How long did that feeling last?
• Did this impulse buy blow my budget?
• Does thinking about this purchase now fill me with joy, guilt, or something else?

 

Use the insight about your indulgences to help you make better money choices in the future.

 

Lose the guilt

Once you’ve decided how much you want to spend each month on indulgences, it’s time to let go of guilt. If you’re spending responsibly, there’s no need to beat yourself up over an impulse buy you could have done without. As long as you’re keeping these just-for-fun purchases within your budget, you can maintain your financial wellness.

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
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Summer Skip-a-Pay

“Pay yourself first” is a catchphrase that refers to prioritizing your personal savings above other expenses. To achieve it, savings should be a fixed line on your budget that happens every month without fail.

Here’s how to pay yourself first.

Review your spending

Take a clear look at your spending. If you already have a budget, this will be as simple as reviewing the column which lists all of your expenses, including your discretionary spending. If you don’t have a budget, track your spending over several months to identify your primary expenses and to find the average amount of money you spend each month.

 

Set short- and long-term saving goals

Short-term savings, or funds you want to be able to access in the near future if necessary, can be allocated to an emergency fund. Experts advise having three- to six-months’ worth of living expenses set aside in an emergency fund in case of a sudden, large expense and/or loss of employment.

Long-term savings should include funds you can afford not to touch for several years or more. Your long-term saving goals can include your retirement, as well as a downpayment on a home, a new car, a sabbatical from work or any other super-big expense.

Narrow down your short- and long-term goals, then attach a number to each savings category.

Set a timeline for each savings goal

Now that you have a number for the amount you want to save, you’ll need to work out a realistic timeline for meeting those goals. It’s best to give first priority to your emergency fund, but at the same time, it’s a good idea to start saving for retirement today so compound interest has an opportunity to work its magic. To that end, you may want to allocate the bulk of your monthly savings to your emergency fund until you meet your goal. Once your emergency fund is full, you can divide your savings more evenly between your short-term savings and long-term savings.

 

Calculate how much you’ll need to save each month

Take your total for each goal, and divide it by the number of months in your timeline. For example, if you’ve decided you want to have an emergency fund of $24,000 established in four years’ time, you’ll divide $24,000 by 48 months to get $500 a month. This is the amount you’ll need to set aside each month to reach your goal in time. Do this for each of your goals.

 

Automate your savings

Once you’ve got your savings plan ready to go, it’s best to make it automatic. You can set up a monthly transfer from your credit union checking account to your credit union savings account. This way, your savings will grow even when you forget to feed them.

 

Congrats–you’ve mastered the art of paying yourself first!

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

 

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU.
Learn More About Banking with a Purpose

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