Published by Southern Lakes Newspapers 2019
Investing IN YOUR FUTURE
PAGE 2 • 2019 • INVESTING IN YOUR FUTURE
Contact
Have you considered professional asset management? Are you looking for ways to minimize your tax burden as you distribute your assets? Is providing for certain charities important to you? FOR OVER 40 YEARS, PREMIERBANK’S WEALTH MANAGEMENT DEPARTMENT HAS BEEN PROVIDING SERVICES SUCH AS THE FOLLOWING: Investment Management • 401(k) Rollovers • IRA’s Estate Settlement • Revocable Living Trusts
Attorney VP/Senior Wealth Christopher Martin Steve Olsen
920.542.1152
Wealth Advisor 920.542.1149
Jan Ruster
AVP/Wealth 920.542.1075
Trusts under Will • Charitable Trusts 336596
Compare Our CD Rates Bank-issued, FDIC-insured 6-month
2.35
%
APY*
Minimum deposit $1000
1-year
2.45
%
APY*
Minimum deposit $1000
5-year
3.10
%
APY*
Minimum deposit $1000
* Annual Percentage Yield (APY) effective 02/06/2019. CDs offered by Edward Jones are bank-issued and FDIC-insured up to $250,000 (principal and interest accrued but not yet paid) per depositor, per insured depository institution, for each account ownership category. Please visit www.fdic.gov or contact your financial advisor for additional information. Subject to availability and price change. CD values are subject to interest rate risk such that when interest rates rise, the prices of CDs can decrease. If CDs are sold prior to maturity, the investor can lose principal value. FDIC insurance does not cover losses in market value. Early withdrawal may not be permitted. Yields quoted are net of all commissions. CDs require the distribution of interest and do not allow interest to compound. CDs offered through Edward Jones are issued by banks and thrifts nationwide. All CDs sold by Edward Jones are registered with the Depository Trust Corp. (DTC).
Call or visit your local financial advisor today.
Debra Cross, CFP® Financial Advisor
www.edwardjones.com Member SIPC
1034 C Ann Street Delavan, WI 53115 262-728-4224
337256
INVESTING IN YOUR FUTURE • 2019 • PAGE 3
Investing is complicated, and many investors find working with certified financial planners is an effective way to secure their financial futures.
STOCK PHOTO Investing in Your Future
Investing requires some measure of risk. Risk understandably makes people nervous, especially in regard to their finances. Investing is an important component of securing your financial future, and the risk involved with investing should never prevent you from putting your money to work. Many people, including both novice and experienced investors, overcome their fears about investing and risk by working with certified financial planners, who can do a lot more than make suggestions.
Explain the jargon Financial planners can make sense of complex products. Financial jargon can be hard to understand for those who do not work in finance. Financial planners simplify the complex array of products available to their clients, helping them understand each of their options as well as which of those options is best for them.
Expand options Financial planners can expand your investment options. Financial planners sometimes have access to products that are not directly available to everyone. Some financial product providers work exclusively through intermediaries (i.e., planners), so working with a financial
planner can give investors more options in regard to how to invest their money.
Do the legwork Financial planners do the legwork. Even seasoned investors with a firm grasp of financial products and services may not have the time to stay up on all the latest investment options. Financial planners do so for a living. A good planner will inform his or her clients of the latest products available and then help clients decide if such products are right for them. That’s a lot of work that busy professionals often do not have the time to do on their own.
Have the qualifications Financial planners are certified. Investors should only work with certified financial planners. Certification standards vary by country, but certified planners have been vetted by third party organizations and have met rigorous professional standards. In addition, to maintain their certification, certified planners are required to provide their clients with straightforward advice and put clients’ needs ahead of their own. Those that don’t could be held financially accountable for providing misinformation or bad advice to clients. (METRO CREATIVE)
Finding help Topics to cover when interviewing financial advisors
Investors put a lot of faith in their financial advisors. Many professionals work hard to save up enough money to invest so they can secure their financial futures. Handing that hard-earned money to a financial advisor can be nervewracking. But prospective investors can calm their nerves by discussing certain topics with planners before deciding to work with them.
FIDUCIARY STATUS
People new to investing will no doubt find some financial jargon confusing. Fiduciary is one term that novice investors may be unfamiliar with. A fiduciary is a financial professional who must place clients’ interests ahead of his or her own. Fiduciaries also must disclose any existing or potential conflicts of interest that might affect clients’ willingness to work with them. That includes how they earn their money. Non-fiduciaries have no such responsibility, so they can sell clients a particular investment without having to
See FINDING HELP, Page 4
investing future IN YOUR
Advantages to working with a financial planner
EDITOR:...................................................................... Tracy Ouellette CREATIVE/PRODUCTION DIRECTOR:.......................Heidi Schulz ADVERTISING DIRECTOR:.................................. Vicki Vanderwerff SECTION DESIGNER:................................................... Jen DeGroot
A publication of Southern Lakes Newspapers LLC 1102 Ann St., Delavan, WI 53115
(262) 728-3411
FOR ADVERTISING OPPORTUNITIES: Call (262) 725-7701 ext. 134
PAGE 4 • 2019 • INVESTING IN YOUR FUTURE
• Finding help (Continued from page 3)
tell clients how their own compensation is affected by that sale. Some fiduciaries work for specific funds that only allow them to sell those particular funds’ proprietary products. That’s the case even if they believe there are other investments that are better for given clients. Such arrangements must be shared with clients for advisors to maintain their fiduciary status. The Certified Financial Planner Board of Standards’ “Rules of Conduct” can be found at www.cfp.net.
FEES
Fees should be discussed before signing an agreement with a financial advisor. Ask each advisor you interview how they earn their money. Some might charge clients a percentage of the assets they’re managing while others may earn money by selling you specific products. Investors have a right, and an obligation to themselves, to understand how financial advisors they work with will earn money. That’s smart investing and can help investors sleep easy knowing their advisors have put clients’ interests first.
SERVICES
Financial advisors offer different services. Some might only suggest investments, while others may help clients come up with comprehensive financial plans that focus on short- and long-term goals. Some investors may only want suggestions, while others may need more from their advisors. Determine which type of investor you are and then find the right advisor for you.
ACCESS
STOCK PHOTO Investing in Your Future
Financial advisors help millions of people across the globe secure their financial futures. Discussing various topics and strategies with prospective advisors is a great way for investors to find the right individual for them.
Investors, particularly those without much experience, might be comfortable knowing they can contact their financial advisors as often as they’d like. Some advisors are more accessible than others, so discuss access with advisors before signing any agreements, and determine if you’re comfortable meeting just once a year to go over things or if you want more routine check-ins. (METRO CREATIVE)
Getting to know you and what you care most about — planning for college, taking care of an elder family member, passing a legacy to future generations, buying a second home — is so important. Once we understand your priorities, together, we can help you pursue the goals you’ve set for yourself and your family. Call to learn more today.
The center of your financial life is all in the family Let us help you take care of what matters most
Tinder Creek Follis Group NMLS#: 557254 Merrill Lynch 2600 Browns Lake Drive Suite A Burlington, WI 53105 262.514.7960
Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation. Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed
May Lose Value
© 2019 Bank of America Corporation. All rights reserved. | AR76MH5H | AD-01-19-2589 | 471089PM-0119 | 01/2019 337387
INVESTING IN YOUR FUTURE • 2019 • PAGE 5
How young people can avoid the debt trap
R
ites of passage come in many forms. Some are religious ceremonies marking an important stage in a person’s spiritual life, while others are less ceremonial but still impactful. For many young people who are old enough to vote but not necessarily old enough to live completely independent of their parents, digging oneself out of debt is an early financial rite of passage. But youth and debt need not go hand in hand, even though statistics suggest otherwise. According to the Federal Reserve, student loan debt reached historical highs in the first quarter of 2018, surpassing $1.5 trillion for the first time ever. That figure is even more staggering when compared to figures from a decade ago, when total student loan was about $600 billion. And it’s not just student loan debt that’s jeopardizing young people’s financial futures. Consumer debt compiled through the use of credit cards has long been a thorn in the sides of young adults, many of whom apply for credit cards before they fully understand the concept of credit, only to learn the hard way that swiping credit cards comes at an oftentimes steep cost. But while the young people of yesteryear might have landed in debt by using credit cards for nonessentials like a night out with friends, a recent survey from the professional services firm PwC found that young adults currently between the ages of 25 and 34 are more likely to buy day-to-day essentials with credit. In fact, 20 percent admitted to doing to so in the past six months, compared with just 6 percent of adults age 55 and over. That could be due to a number of factors beyond young adults’ control, including low and stagnant wages, but it also might be a byproduct of young adults not knowing how to avoid debt. If it’s the latter, then young adults can try to employ the following strategies to avoid falling into the debt trap.
See DEBT TRAP, Page 6
STOCK PHOTO Investing in Your Future
The cost to attend college extends beyond tuition and room and board. Many additional expenses can stretch families’ budgets.
It adds up fast
Be aware of all of the costs for college
College is often met with excitement and interest by students pursuing their passions and what they hope will be fulfilling, lucrative careers. And the rising costs of college, coupled with the growing number of students taking on substantial debt to finance their educations, make it necessary that prospective students consider their earning potential when deciding on a major. According to the College Board, the average cost of college tuition and fees for the 2017-2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents attending public universities. Canadian citizens studying in Canada can expect to pay $6,571 per year, according to Statistics Canada. The cost of tuition and room and board may catch parents’ eyes, but there are some lesser known expenses associated with college that can make attending school even more expensive. According to Cappex.com, a website offering ideas on how to pay for college, the extra costs of college can cost between $250 and $500 per month. The following are some lesser-known expenses that college students and their families may need to budget for this school year.
Transportation STOCK PHOTO Investing in Your Future
Many college students watch their student loans increase with growing anxiety, but there are ways for young people to avoid debt and pave the way for a bright financial future.
Commuter students will need to drive to and from campus, which involves budgeting for gas, repairs and auto insurance. Students who live on campus may be subjected to a high fee for a resident student parking pass. Colleges in the United States earn an average
of $4 million to $5 million in parking revenues each year, according to the most recent rate study from the National Parking Association. A typical four-year college or university in the United States charges about $635 per space for the school year. Other students use public transportation or ridesharing services to get around. Those fees can quickly add up, too. Students attending school far away from home also need to budget for plane tickets home during the holidays and other breaks.
Fraternities and sororities Many students join Greek organizations to fully immerse themselves in the college experience and make new friends. Many of these groups charge fees to prospective pledges and then semester dues once students are accepted. Parties, trips, living expenses, and other expenses may come up as well.
Added fees Many colleges and universities charge technology fees, sports center fees and activity fees. Exploring these fees in advance of the school year can help families create accurate budgets.
Dining out Families spend hundreds of dollars on campus meal plans per semester, but students also like to visit local eateries during the school year. Snacks, lunches and dinners purchased from such establishments can cost hundreds of dollars per year. Farmer’s Financial Solutions, a division of Farmer’s Insurance, says offcampus dining expenses cost an average of $770 a year.
School supplies A new laptop or tablet, textbooks and other supplies a professor requires can cost thousands of dollars. The College Board estimates students spend $1,300 on books and supplies in a typical school year. (METRO CREATIVE)
PAGE 6 • 2019 • INVESTING IN YOUR FUTURE
Many different factors impact the size of modern families today, and the rising cost of raising children may be the most influential of such factors.
STOCK PHOTO Investing in Your Future
What it costs to raise kids today A generation ago, it was common to see families with four or more children. But things are a bit different today. Pew Social Trends indicates that parents now have 2.4 children on average, a number that has remained fairly stable for two decades. In addition, since 1976, the share of mothers at the end of their childbearing years who have one child has doubled, from 11 percent to 22 percent. While shrinking families may be based on many different factors, including postponing having children until later in life, the rising costs of raising kids may have something to do with it as well.
• Debt trap
The U.S. Department of Agriculture says the cost of raising a child today has climbed to $233,610, which excludes the expenses of college. A 2011 article that appeared in the Canadian publication MoneySense estimated childrearing costs to be $12,824 per year, which adds up to $243,656 by the time a child reaches age 18. It’s also well documented that more adult children are living with their parents for longer than kids used to stay with mom and dad. Pew Research has found that roughly one-third of women and half of men between the ages of 18 and 34 are still living at home, surpassing records set
Did you know? The U.S. Department of Agriculture says the cost of raising a child today has climbed to $233,610, which excludes the expenses of college in the 1940s. This means expenditures on child rearing may continue long after kids reach adulthood. As a result, it is easy to see how
having multiple children can be a major source of financial stress for the average middle-income family. The financial planning resource NerdWallet estimates that the cost of raising a child today is higher than the DOA figures, coming in at roughly $260,000 – and that is just for the basic essentials. Throw in tiered levels of care, including everything from more expensive choices for food and clothing, and extras for early childhood care, sports lessons, music instruction, and electronics/gaming, and the cost can get as high as $745,634.
(METRO CREATIVE)
(Continued from page 5)
Explore your repayment options According to Student Debt Relief, a private company that looks to educate and empower consumers about student loan debt, the average college graduate in the class of 2016 had $37,172 in debt. That’s nearly $10,000 more debt than the average graduate from the class of 2011. Young adults struggling to repay their student loans can explore various options, including federal student loan repayment plans, such as the Pay As You Earn plan and the Income- Based plan. Each plan is different,
but young adults should know that they have many repayment options.
Avoid consumer debt Interest rates on credit cards can be high, especially for young people without lengthy credit histories. As a result, it’s best to only use such cards for emergencies and not to pay for nights out with friends or a new pair of shoes. Consumer debt that’s not paid off in full each month also can adversely affect young adults’ credit ratings, which can hurt them when they get older and
look to buy their own homes or other big-ticket items.
Live at home While many college graduates want to maintain their independence and live on their own after graduation, moving back in with mom and dad might be the most financially savvy move to make. Doing so allows young adults with jobs to begin building their nest eggs and can help them avoid having to use credit cards to meet their day-to-day needs. Debt ensnares many young adults. (METRO CREATIVE)
Creating a financial plan
INVESTING IN YOUR FUTURE • 2019 • PAGE 7
Simple ways to keep a realistic budget
Successful financial plans often begin with the creation of a budget. A budget is an estimate of income and expenses in a given period of time. Budgets help with long-term goals like paying off a mortgage or sending a child to college as well as short-term goals like financing a dream vacation. Not all budgets are alike, and when people hear the word “budget,” they may get apprehensive. Budgeting may require making some concessions in regard to spending habits, but it doesn’t have to put a complete damper on plans. In fact, with a budget in hand, people may be more free to spend because they will have a stronger grasp of their financial situation. Making a realistic budget does not have to be a chore. Here is how to get started.
LIST THE NECESSITIES Begin by calculating the costs associated with fixed needs, including rent/mortgage, utilities, food, and any other bills you have to pay each month.
ADD EXISTING DEBT Debt includes any routine payments being made to credit card companies, student loan lenders, car payments, or unpaid medical bills.
LOOK THINGS OVER Conduct a spending analysis over
several months. Budgets are easier with fixed numbers, but unforeseen variables can affect spending every month. These can include the extras for clothing, entertainment and much more. Average the cost of these expenses throughout your analysis period so you can get some idea of how much to allocate for them.
GET TECH HELP Use software or apps to help. There are plenty of resources available to help people calculate their budgets and get a picture of their financial habits. Resources such as Mint, YNAB (You Need a Budget) and various accounting programs can produce spreadsheets, pie charts and bar graphs as you work to create a budget.
START TRIMMING GRADUALLY Quitting a certain lifestyle cold turkey can be jarring. Gradually cut back on your spending if your analysis suggests that’s the way to go.
AUTOMATE SAVING Immediately removing a set amount from your paychecks by having it directly deposited into a separate account can remove the temptation of spending too much from your financial equation. Budgets are a key part of a financial plan and can help people reach their goals. (METRO CREATIVE)
STOCK PHOTO Investing in Your Future
Budgets do not have to be difficult. With a few strategies, a realistic saving and spending plan can be made.
First in home mortgages Now is the time to think “First” ... for your home mortgage refinancing needs
“First citizeNs” has attractive fixed term rates. Call to see how low they really are! Low borrowing rates also mean it’s a good time to purchase a new home.
Think “FirsT” ... for all your financial needs. Mortgage Center is a new service available online to apply for a mortgage loan safely and conveniently from home. Available on our website www.firstcitizensww.com under Home Mortgages. You can get current home loan rates and get a personalized rate quote.
Main WhiteWater Office WeSt 1058 W. Main Street 207 W. Main Street Whitewater, Wi 53190 Whitewater, Wi 53190 (262) 473-3666 (262) 473-2112
270147
firstcitizensww.com
eaSt trOy PaLMyra Office Office 2546 e. Main Street 111 e. Main St. east troy, Wi 53120 Palmyra, Wi 53190 (262) 642-2530 262/495-2101
PAGE 8 • 2019 • INVESTING IN YOUR FUTURE
Preaching patience Financial adviser emphasizes staying the course during turbulent market BY
Todd Mishler
COPY EDITOR
They may not be the words some people want to hear, but he keeps repeating them ad nauseam. Brian Lauer was born and raised and has spent most of his life in Racine County. He’s also worked in the financial services business for 33 years. He has operated Lauer Financial Services out of an office in Waterford since 1992. Brian Lauer The financial adviser said knee-jerk reactions – especially during volatile markets such as we’ve seen in recent weeks – seldom yield big results. So staying the course concerning investments is the preferred road map to financial wellbeing and security. “If somebody does a good job of setting their goals and understanding their risk tolerance, then they will be putting themselves in a good position,” Lauer said. “In my practice, I work with all of my clients on asset allocation. And if they do that properly, then they don’t have to worry about any of these wild fluctuations in the markets.” He said that basic – maybe boring – strategy has worked across the board during the recent roller coaster ride on Wall Street. However, there are exceptions. “My phone hasn’t been ringing at all,” Lauer said. “Although, one client went against my advice and decided to go with more risk, and then he calls me up and says, ‘Now what?’ “The reality is that by charting a proper course and setting long-term goals, you avoid making bad shortterm decisions,” Lauer added. “I always tell people, ‘Don’t fall in love with a particular stock.’ But someone always does … and they run the risk of getting jilted.” They may be clichés, but Lauer said it’s all sound advice: Set goals, work to achieve those goals, stay the course and think long-term. “The problem is they’re reacting to the market, and that usually is counterproductive,” Lauer said. “You know the adage about buying low and selling high, but many people do the opposite. They let their emotions get in the way. That’s always counterintuitive to good financial planning.” While he doesn’t own a proverbial crystal ball, Lauer said he’s optimistic about the 2019 financial landscape despite a rocky start. “As far as the economy goes, barring any major events, of course, interest rates are stabilizing and they don’t expect many more increases, so that’s stabilizing bond prices,” he said. “I don’t see double-digit gains (in the market) in the future like we’ve been seeing, but for this year, there is a lot of strength in the economy. Energy costs should be down, so I see a solid year financially.”
STOCK PHOTO Investing in Your Future
Working with a financial planner can help investors maximize their investments to be as tax-efficient as possible. Financial experts understand funding limits and the timeline in which to invest for tax advantages.
Tax-advantaged
INVESTING
Investing has always been a means for people to grow their wealth and make their money work for them. Investors know that protecting investment earnings is important, and that often can be achieved through taxadvantaged investments. Tax-advantaged investing, also called tax-efficient investing, allows investors to maximize the profits they can keep after taxes are filed. Investment selection and asset allocation are important factors affecting returns, but minimizing taxes and other costs is also crucial, according to the Schwab Center for Financial Research. There are some ways for investors to keep more of their assets. A qualified financial advisor can help navigate the waters of the best tax-advantaged options. When investing on an annual basis, there are some general accounts people can use to their advantages.
IRAs
A 401(k) or 403(b)
College savings accounts
These accounts are an ideal way to get “free” money. Funds in these accounts are put away pre-tax. Because your adjusted gross income is lowered, so is your federally taxable income. In addition, some employers may match contributions up to a certain percentage. Companies also may offer Roth 401(k) plans, which differ from traditional plans in regard to when you pay taxes. With Roth plans, you pay taxes up front. When the money is eventually withdrawn, those withdrawals are tax-free.
Investing in a 529 plan can be wise for parents. While money is invested after tax, it is tax-free when withdrawn for qualified higher education purposes.
Individual retirement accounts are similar to 401(k) plans in that they’re tax-deferred. However, they generally offer greater freedom in investment choices. Roth IRAs, like the Roth 401(k) plans, must be paid with after-tax dollars. But the advantages are higher contribution amounts, withdrawals that are tax-free and no mandatory withdrawals when a person reaches a certain age.
Tax-free savings account Canadian investors can explore TFSAs. These are accounts that do not tax any contributions, interest earned, dividends, or capital gains, and can be withdrawn tax-free. It is available to individuals ages 18 and older in Canada and can be used for any purpose.
Health savings accounts To get a tax deduction on health expenses, an HSA is the way to go. HSAs are linked to high-deductible health plans and allow account holders to use the funds for qualified spending. (METRO CREATIVE)
BY
INVESTING IN YOUR FUTURE • 2019 • PAGE 9
Scammers capitalize on mistaken beliefs Devious thieves target local family Heather Ruenz
STAFF WRITER
It was roughly four years ago when relatives became concerned that a family member who lives in the area was being scammed out of money. “He had won a prize but had to pay tax to claim it and that ‘tax’ was usually a check but sometimes he would purchase items and send them – all of it out of the country,” a relative said. The relative estimates the family member has lost well over $500,000. In an effort to protect the identities of those involved the relative who agreed to be interviewed and the family member they’re referring to for this story will
remain anonymous. To address the logical first question many have – why did the man fall for the scam in the first place? – the relative said the scammers, a team of them, found numerous ways “to connect” with the man. “They would work in circles and have money and items sent to different people. On occasion they would send checks (to him) and some would go through, which was enough to stay hooked,” the relative explained. “And there is a person, the point person, that calls just to talk and not ask
See SCAMMERS, Page 10
STOCK PHOTO Investing in Your Future
Telephone scams that target the elderly – often promising windfalls such as lottery winnings – can end up costing victims a lifetime of savings, as the family of one elderly victim learned.
Good neighbors you can count on. Community-focused, independently minded, locally grown. You live in the Stateline area, shouldn’t you bank here too? We think so. Relationships to us are more than business transactions, they’re about getting to know you – our neighbors – and helping families and local businesses flourish. We believe our rich history and strong connection to the community is what allows us to continue to provide great service and Sound Advice. With 16 locations in Southern Wisconsin and Northern Illinois, we are the most convenient local bank around!
Come visit us and we'll show you why banking local matters. bankatfirstnational.com | 800.667.4401
270301
Member FDIC
PAGE 10 • 2019 • INVESTING IN YOUR FUTURE
• Scammers
(Continued from page 9)
for money. To find similarities between them to talk about as a way to connect, and of course, as a way to get more information,” the relative said. Dan Dixon, an officer with the Elkhorn Police Department who is familiar with this case, said there has been an increase in scams recently. “We just had another one where someone sent $8,000 to pay ‘bond’ for their grandson. That money was sent in two boxes,” Dixon said. He said in many of the cases he’s been involved in, bank employees advise the customers they’re likely falling for a scam but all too often, those warnings aren’t taken seriously. “Most bank staff will warn people
if they come in and withdraw a large amount of cash or get a cashier’s check but scammers scare them into believing they have to do what they’re told so the fear wins,” Dixon said. In another situation, Dixon said, a local resident was told she owed on a credit card and if she didn’t start paying they’d put her in jail. “She didn’t think she owed but was scared so sent money anyway,” he said. Scaring people is a tactic used regularly, according to the relative of the man. “They got mean at times and would threaten,” the relative said. Adding to the stress is that power of attorney does not apply to trust funds so
MANGOLD INSURANCE, INC. PERSONAL BUSINESS FARM
LIFE • DISABILITY • MEDICARE • GROUP HEALTH 1050 Milwaukee Avenue • Suite 100 • Burlington, WI 53105 800-242-2282 • 262-763-7644 • Fax 262-763-0971 337487
www.mangoldinsurance.com insurance@mangoldinsurance.com
the man still has access to much of his money – and the scammers know that. “Even when the kids went through the process of getting power of attorney for financial, they would say the kids were awful people who were just trying to get their hands on the winnings,” the relative said.
‘It hasn’t stopped’ The scam targeting the man started in 2015 and “it hasn’t stopped,” the relative said. It hasn’t only involved the man sending money and items to the scammers, either. “They even got the social security deposit rerouted. It was rerouted back eventually but it’s one thing after another. The scammers are smart and explain how to do everything, even cashing in an annuity and a life insurance policy,” the relative said. Adding to the stress of the situation is that while local banks tried to stop the man from sending money and gifts, others have taken advantage of him and the situation. “Quick loan places for cash, one of them had a 400 percent interest rate, and that happened many times. I can’t even believe 400 percent is allowed,” the relative said. Because the scammers sometimes give orders for specific items rather than money, the man has sent several pieces of jewelry. “We pleaded with a jeweler to not sell anymore jewelry because of the scam. But sure enough, another expensive
We desire to be a true strategic partner with our business customers.
Feeling helpless “My heart just constantly breaks thinking of how many people out there don’t have family watching out for them,” the relative said. “Even though we haven’t been able to completely stop it, it could be worse.” “Most people who are scammed are in their right mind. The bottom line is we can’t stop it and the scammers know that,” Dixon added. The relative is hopeful by sharing the family member’s story it will prevent someone else from falling for a scam. “If I can help one or two others it’s worth it, even if it’s a lost cause for us personally,” the relative said. Dixon and the relative said they would like to do more to try to prevent similar situations. One possible scenario would be to host a panel of experts including a law enforcement officer, a banker, a financial advisor and an attorney. “Maybe they could discuss different scams, offer tips for family members of people being scammed, and tell people what, if any recourse they have,” the relative said. “I became a police officer to help people. We have to do something,” Dixon added. For more information, including those interested in helping with a forum about scams is asked to contact Dan Dixon at 262-723-2210 or ddixon@elkhornpd.org.
Mortgage Loans
Business & Construction Loans We do equipment loans, commercial real estate loans, commercial construction loans, operating lines of credit, Letters of Credit.
piece of jewelry was sold after that,” the relative said. “That’s one of the worst parts – that others are making money, too, from this.”
For all your lending needs, big or small, business or personal, we have the right loan for you. Contact a lending specialist today Fox River State Bank 241 E Jefferson Street Burlington, WI 53105
NMLS#579143
NMLS#579142
From the smallest projects to the biggest dreams, a FRSB Loan can help make them all a reality.
www.foxriverstatebank.com BANK NMLS# 445432
NMLS#89488
NMLS#52373
NMLS#777464
337384
INVESTING IN YOUR FUTURE • 2019 • PAGE 11
Where people spend most Who hasn’t tallied up monthly bills or looked at a credit card statement and pondered if they’re spending a little too much? The average person also may wonder how their expenditures compare to other people around the country and what they need to do to enjoy financial freedom in retirement. According to the U.S. Bureau of Labor Statistics, the average American household spends just about $57,000 each year between necessities and luxuries. Canadians are spending even more than their neighbors to the south. Statistics Canada indicates that, in 2016, the average annual expenditure on goods and services per household totaled $62,183. So how are people allocating their funds? The results may surprise you and indicate where it’s possible to trim some fat and save big bucks. Across North America, housing is the largest line item in people’s budgets. Various sources suggest that housing and shelter needs account for anywhere from 30 to 40 percent of most household budgets. By making housing decisions based on areas with the most efficient cost of living, individuals can save considerably over the long run. The second largest expenditure category is transportation. This accounts for the cost to finance or lease a vehicle and insure it, and it also includes urban dwellers who rely on public transportation or ride-share services to get around. Keeping transportation budgets in check can be great a way to save. Food is the next largest expense. While everyone needs sustenance to stay alive, how that money is allocated can make a big difference in saving versus spending. The BLS says that food at home costs around $4,000 annually, while spending on dining out amounts to around $3,100, for a grand total of $7,100 each year. Statistics Canada notes that Canadian households spent an average of $8,784 in 2016 on food and that 26 percent of that spending was on dining out. Cutting back on dining out can be a great way to save money, as can becoming a more sale-conscious grocery shopper. Healthcare, utilities and entertainment are the next most costly expenditures, respectively. But each of those items are considerably less expensive than the top three. Therefore, making changes to where one lives, how one gets around and how one eats can certainly add up to considerable savings. (METRO CREATIVE)
STOCK PHOTO Investing in Your Future
If you’re looking to access the equity in your house to help you complete a home improvement project or consolidate your bills, taking time to know your options can potentially save you thousands of dollars.
How cash-out refinancing can turn into a
COSTLY MISTAKE
After years of making regular mortgage payments, it feels good to watch your net worth make upward progress. That’s especially true if your house is also gaining value. With a growing amount of equity comes peace of mind, knowing you have the option of tapping into it when you want. Whether it’s time for a new roof or you need to consolidate debt, you may see a traditional cash-out mortgage refinance as the ideal tool to access the money you need. However, if you’re considering a cash-out refi, you may be unaware of some of the pitfalls, or you may not know about the alternative solutions that might work in your financial favor. With a cash-out refi, homeowners can borrow against the equity in their home by taking out a new mortgage loan. This new loan includes the original loan balance and the additional amount borrowed against the equity. “On the surface, a cash-out refi loan appears to be the better option because these tend to have better interest rates compared to other types of loans, especially credit cards and personal loans,” says Wendy Harrington, chief marketing officer at Figure Technologies, a company that offers lending solutions to homeowners. “However, these can end up costing more than homeowners expect, and it’s important to take time to understand what comes with the territory.” Harrington offers three things all homeowners need to consider before they opt for a cash-out refi loan:
Rates are rising After enjoying historical lows, mortgage interest rates have reached 5 percent, the highest in eight years, according to the Washington Post. With a cash-out refi, homeowners face trading their lower interest rate for a higher one. STOCK PHOTO Investing in Your Future
While housing is usually the biggest chunk of household budgets in North America, the second largest is transportation cost. Those without public transportation have to buy or lease a vehicle and keep it maintained, increasing costs.
Less convenience The application and approval process for a cash-out is anything but efficient, thanks to time-consuming activities like property appraisals and in-person closings. In all, the loan process can take anywhere from 30 to 60 days.
Additional fees
Borrowers often don’t realize that cash-out refis come with closing fees for such things as appraisals, title searches and credit reports, adding another layer of cost to the loan. A smarter solution that can potentially spare borrowers thousands in interest cost, according to Harrington, is a home equity loan. Instead of starting over with a new mortgage, you’d simply take out a separate loan against the equity in your property. This option lets you keep your mortgage interest rate. To make things more clear, here’s a comparison of how the two loans could affect a homeowner like you. Let’s say you took out a $175,000 mortgage six years ago at 3.625 percent interest. After making monthly payments of $798, your balance is $153,365. Now you’re looking to do some renovations and pay off some credit card debt, and you need to borrow $75,000. With your home valued at $300,000, there’s more than enough equity. With a cash-out re-fi loan, you’d “reset” your mortgage balance at $228,365 with an interest rate of, say, 5.75 percent interest. That brings your monthly payment to $1,333, but in 30 years, when the mortgage is paid off, total interest comes to $287,225 (that’s the interest you paid on your original mortgage and the interest you’ll pay with the refinanced loan). With a $75,000 home equity loan, you may receive a higher rate, but it applies to a much smaller loan amount. If you secured a home equity loan at 9.0 percent APR, your monthly payment for your mortgage and equity loan combined would be slightly higher at $1,559. However, the term of your equity loan is 15 years, and your mortgage is still on track to being paid off in 24 years. In all, your total interest payments come to $174,238 (original mortgage plus home equity loan). Bottom line: In this scenario, a home equity loan comes out as the better financial decision, because not only are you finished paying six years earlier, you would save $112,987 in interest alone.
See COSTLY MISTAKE, Page 14
PAGE 12 • 2019 • INVESTING IN YOUR FUTURE
Pros and cons to early retirement
A lifetime of working compels many people to look forward to their retirement. Some people even work to retire early. But what are the advantages of early retirement beyond starting a life of leisure? And are there any detriments to this plan? A 2014 survey by the financial services provider TIAA-CREF found that 37 percent of Americans plan to retire before age 65. However, many of them will not have control over the matter. Those who do may want to consider the pros and cons of early retirement.
ADVANTAGES
DISADVANTAGES One of the disadvantages of early retirement is a loss of income. Contributions to retirement accounts also
STOCK PHOTO Investing in Your Future
Many people seek early retirement so that they can live a life free of the constraints of schedules. In retirement, time becomes, more or less, a retiree’s own. Leaving a job can be a boon to a person’s health as well. Relieving oneself of the pressures and stresses of professional life can free up the mind and body. Stress can affect mental and physical health, taxing the heart and contributing to conditions such as depression or anxiety. According to the Mayo Clinic, stress can cause headache, muscle and chest pain and contribute to trouble sleeping. The earlier the retirement, the more opportunity to travel before health issues begin to limit mobility. Early retirement also can be a way to volunteer more or even start a new job opportunity – one where workers have greater control over their schedules and careers.
Retiring early is a complex issue that requires weighing the pros and cons.
ceases at retirement. This can lead to financial setbacks if adequate savings were not allocated for retirement. According to the resource Wealth How, some people who retire early fear outliving their savings. While retiring early may be good for health, it also can have negative
consequences. An analysis from the National Bureau of Economic Research found that retirement can lead to declines in mental health and mobility as well as feelings of isolation. Retiring early may jump start these health implications. Another consideration is that health
insurance provided by an employer typically ends at retirement. That means having to pay out of pocket until a person ages into government-subsidized healthcare, such as Medicare in the United States, at age 65. (METRO CREATIVE)
Your path to Financial Wellness starts here.
We’ll guide you and keep you on the path to Financial Wellness and Peace of Mind
Brian Lauer, Financial Advisor
(262) 534-7100 Serving Southeast Wisconsin for over 33 years!
337386
337383
INVESTING IN YOUR FUTURE • 2019 • PAGE 13
The bottom line is that it’s easy to underestimate the importance of retirement planning. The good news is that with more tools and innovation, people may be better able to achieve the financial future they hope for as they grow older.
STOCK PHOTO Investing in Your Future
Retirement planning –
How ‘life’ gets in the way and how to overcome the obstacles If you’re like many Americans, retirement planning may not be high on your “to-do” list. When life is busy and you’re shouldering the burden of looking out for yourself and your family, setting up a retirement plan can slide down the priority list – especially if you’re hoping it will somehow be easier in a year, two or more. But if you look at the root causes of inertia behind retirement planning, it’s clear how the effects from your behavior can be significant. Below are some insights to help you get on track and better understand the kinds of behaviors that can get in the way of planning for your financial future.
IT’S OVERWHELMING Saving for retirement can feel openended and ambiguous, in large part because it’s difficult to predict just how much you’ll need. Adding to the stress are many hardto-anticipate variables, including how long you will live and healthcare needs. The good news is there are on-line calculators that can assist you in determining what your future needs may entail.
WE CAN’T SEE THE FUTURE Researchers have found that people struggle to identify with their future selves, according to a study published in the Journal of Marketing Research. It’s not just young people who have difficulty imagining how long they’ll live in retirement – older Americans also often underestimate how long their retirement nest egg will have to last. Increased life expectancy means we may live 20 or 30 years – or even longer – in retirement. The good news is that companies like Prudential Retirement now offer interactive games like an Aging App to help people better understand how the decisions they make today could influence their futures.
WE PROCRASTINATE Research shows that for many people, procrastination plays a big role in hindering retirement planning. On average, we spend two hours a day procrastinating. In our busy lives, it’s often easier to daydream about our future than it is to spend time planning for it. The good news is that if you haven’t
begun saving for retirement, it’s never too late to begin. Try taking a small step forward and consider setting aside 1 percent of your paycheck for a retirement account. Or, if you already have a retirement account but you’re saving very little, increase your contribution by 1 percent.
BUDGETARY PRESSURES Families have other future needs to plan for, such as their kids’ college education or saving for a down payment for a home. Add in the immediate need to cover day-today expenses, and it always feels like it’s “the wrong time” to save for retirement. The good news is that there is a great deal of information available online to help with retirement planning. Take time to educate yourself and become familiar with the various tools that are available.
MAKING RETIREMENT PLANNING EASIER “It turns out that many financial companies and employers are acknowledging the psychological barriers that can get in the way of retirement
planning,” says Harry Dalessio, head of full service solutions at Prudential Retirement. “Today, many employers have products and solutions to assist with student loan debt and that help employees set aside money for emergencies. Financial counselors are now available in many companies to discuss approaches to help get employees on the right path,” Dalessio said. In addition, important innovations, such as automatic enrollment, where new employees are automatically enrolled in their company’s retirement plan, have led in many cases to plan participation exceeding 90 percent. Also, simplified products such as target date funds are making it easier for investors to benefit from savings products that are appropriate for each worker’s age and goals. Finally, innovations, such as the ability to use mobile devices and gamification tools, make it even easier to stay engaged. “Even with these innovations, there is still ample opportunity to think bigger, and make retirement planning more accessible to employees,” says Dalessio.
(BPT)
PAGE 14 • 2019 • INVESTING IN YOUR FUTURE
Tax changes breed uncertainty
BY Tracy
Government shutdown slows the flow of official information
Ouellette
STAFF WRITER
With the new federal tax law changes going into effect this year, and when the government was shut down many people had questions and nowhere to find answers at the moment. “We don’t have many answers,” said area accountant Eric Kramer in January. “With the government shutdown, the parts of the IRS that are really shut down are the areas involved in getting information and permitting. These are major changes and they are incomplete. There are a lot of fixes that need to be made but haven’t been done. “It’s a nightmare,” Kramer added. “They’re working off hand-written notes on the Job Act and someone has to figure out how to make these things work and they haven’t.” Although the government reopened at the end of January, the backlog at the IRS was expected to continue to cause issues for tax time this year.
The public is nervous Kramer said he’s seen a lot of nervousness about this tax season from the public and within the accounting profession. “They’ve eliminated the 1040EZ and the 1040A and everyone is filing on the new 1040 and there is little explanation with that form. It just has lines without
much guidance and every line has a schedule, so while they tried to make it a postcard like they promised, some people will be filing a postcard with 10 attachments,” Kramer said. Additionally, with changes to the standard deduction and who and what can be itemized, Kramer said he’s getting a lot of calls about what people should be doing. “We’re getting calls from people we don’t know because no one is answering the phone at the IRS, so we’re ready reference now. They’re calling us and while we have some answers, we can’t get information from the IRS either, so we can’t always answer their questions. “I think this will throw a lot of people off. They might be aware of the standard deduction changes and that not many will be itemizing this year, but they don’t really know what that means,” he said. “People who do itemize will have limits on their deduction, especially in Wisconsin. The limit is $10,000 total, so if you have $8,000 on your federal and $4,000 for the state, you’re still limited to that $10,000.”
Surprises in store Kramer said while most people will be using the standard deduction now, not everyone will and other changes that will affect the bottom line are going to be a “surprise” to many. The standard deduction for 2018 is $12,000 for single filers and married filers
ESTATE PLANNING CAN BE TRICKY Drafting a last will and testament is an essential component of estate planning. Despite the importance of having a will, a recent survey from AARP found that two out of five Americans over the age of 45 do not have one. Putting wishes down on paper helps avoid unnecessary work and sometimes heartache upon the death of a loved one. Wills allow heirs to act with the decedent’s wishes in mind, and can ensure that assets and possessions will end up in the right hands. Estate planning can be tricky, which is why many people turn to attorneys to get the job done right. Attorneys who specialize in estate planning will no doubt discuss the following topics with their clients.
guardians their underage children or dependents.
Assets owned
Executor
Make a list of known assets and figure out which assets are covered by the will and which will have to be passed on according to other estate laws, such as through joint tenancy on a deed or a living trust. For example, life insurance policies or retirement plan proceeds will be distributed to your named beneficiaries. A will also can cover other assets, such as photographs, clothing, cars, and jewelry.
An executor is a trusted person who will carry out the terms of the will. This person should be willing to serve and be capable of executing the will. People who die without a valid will become intestate. This means the estate will be settled based on the laws of where that person lived, and a court-appointed administrator will serve in the capacity to transfer property. This administrator will be bound by laws and may make decisions that go against the decedent’s wishes. To avoid this outcome, a will and other estate planning documents are crucial.
Guardianship Parents’ wills should include a declaration of who they want to become
Pets Some people prefer to use their will to also dictate guardianship for their pets and to leave money or property to help care for those pets. However, pets do not have the legal capacity to own property, so one shouldn’t gift money directly to pets in a will.
Funeral instructions Settling probate will not happen until after the funeral. Therefore, funeral wishes in a will often go unnoticed, states the legal advisement resource Find Law.
(METRO CREATIVE)
STOCK PHOTO Investing in Your Future
Changes to federal tax law in 2018 will mean major changes in the way people file income taxes this year, according to accountant Eric Kramer. An increase in the standard deduction will likely mean fewer people will itemize deductions.
filing separately, $24,000 for married filers filing jointly and $18,000 for heads of household. Another thing that’s going to affect people who have been itemizing is home equity interest and the fact that it can’t be used as a deduction unless the money was used for home improvements, Kramer said. “Generally that interest is no longer deductible. A house addition would be but not if the money was used to buy a car or a boat, and many people don’t realize that,” he said. Estate deductions are gone now too along with a “whole basket of miscellaneous deductions allowed anymore,” Kramer said. He added that two recent cases came to mind with this elimination. “On-the-road salesmen and over-theroad truckers –employees who work for companies – but have really high expenses for gas, hotels, etc. can’t deduct that anymore,” he said.
Withholding concerns Kramer said one of the big concerns among tax preparers this year is whether the tax withholding for 2018 is going to be insufficient when the tax bill is due. “The IRS got pressured to come out with new tax tables but not new W-4s and the old ones are still being used, but they’re not really valid anymore,” Kramer said. “No one really knows what the withholding really looks like and we’re going to find out in a month. There was this big push for taxpayers to see the tiny
• Costly mistake
benefit they got from the tax break that the 1 percenters benefited greatly from and the withholding was adjusted for that. I think there’s going to be some real pain in that area, especially if you have more than one job. “I think there are going to be a lot of people who are unprepared to pay taxes this year.” Kramer said there are going to be “winners and losers” with the tax changes. “A lot of people will benefit from the increased Child Tax Credit, which was $1,000 and went to $2,000 per child and the range which it applies changed dramatically and people will benefit from that. Incomes up to more than $300,000 can apply for it now. On the other hand, some people who had high itemized deductions, might not do as well. Time will tell.” Kramer said that while many will find filing the new 1040 easier, they do look different and people should be prepared. “If they don’t understand it, they better get help,” he advised. “I think a lot of people who got comfortable with the old forms are going to find it strange. Everything got thrown up in the air this year and it all came down in different pile. Some are easier, some are not. And there’s always that wonderful possibility of shooting yourself in the foot … or worse places.” Eric Kramer is the owner of East Troy Tax Service LLC, 2068 Division St., East Troy. For more information, call 262-6423058 or visit www.easttroytaxservice.com.
(Continued from page 11)
Another upside to using solutions other than cash-out refis is that there are now convenient and fast solutions that let borrowers access their equity with ease. Figure Home Equity Loans PLUS lets borrowers apply for a loan online and get notified of approval in five minutes. Upon approval, funds can be deposited in the bank account of choice in as little as five days*. With loan terms of 5, 7, 10 and 15 years at a fixed rate, you can get the cash you need with a payment that fits your budget. Figure has built a calculator to show how
much you could save using a Home Equity Loan PLUS instead of a cash-out refi. Calculate your potential costs and savings at Figure.com/cashout. *Approval in five minutes and funding in five days is based on a typical customer experience for properties located in counties that permit e-signatures and e-recording. Actual funding times may vary. Due to state law, funding in 5 days is not applicable to first lien loans secured by owner-occupied properties in Vermont.
(BPT)
INVESTING IN YOUR FUTURE • 2019 • PAGE 15
A custom-fit investment plan is just a conversation away Done right, a financial advisor works with you to develop an investment plan designed to help you meet your unique goals. We can help you create your personalized plan, and we’ll review it with you on a regular basis to help keep you on track. Working together is all about you. Call for a complimentary portfolio consultation.
Neil Hebb Financial Advisor neil.hebb@wellsfargoadvisors.com
Connie Sevick Senior Client Associate connie.sevick@wellsfargoadvisors.com
Patrick Gaitens First Vice President – Investments patrick.gaitens@wellsfargoadvisors.com
141 West Chestnut St., Burlington, WI 53105 Direct: 262-763-8488 Investment and Insurance Products:
NOT FDIC Insured
NO Bank Guarantee
MAY Lose Value 337389
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. © 2016 Wells Fargo Clearing Services, LLC. All rights reserved. CAR-0218-04880 A2062 IHA-578762
PAGE 16 • 2019 • INVESTING IN YOUR FUTURE
WHATEVER YOUR FINANCIAL GOALS ... We’ll help you reach them. Thrivent Financial offers a full range of products, services and tools to help you achieve financial security, including: • Life insurance • Annuities • Health insurance
• Estate and legacy strategies • Education funding options • Retail brokerage
• Retirement options • Managed accounts • Mutual funds
We’ll create a financial strategy that reflects your goals and values. Scott P Herrmann, FIC Wealth Advisor 400 N Pine St Burlington, WI 53105 262-806-7390 CA Insurance 0L84872
Kristen Lafranzo Associate 400 N Pine St Burlington, WI 53105 262-806-7390
Christopher Wiess Insurance Office Professional 400 N Pine St Burlington, WI 53105 262-806-7390
Joshua W Duesterbeck, FIC Regional Development Director 1421 Racine St, Ste G Delavan, WI 53115 262-740-9040 CA Insurance 0L41601
Bill Duesterbeck, LUTCF®, FIC Financial Associate 1421 Racine St, Ste G Delavan, WI 53115 262-740-9040
Kate Abbe Financial Associate 1421 Racine St, Ste G Delavan, WI 53115 262-903-9071
Diane Kennedy Nopenz Financial Associate 500 Interchange N, Ste 3 Lake Geneva, WI 53147 262-812-8013
Joseph Pierce Financial Associate 500 Interchange N, Ste 3 Lake Geneva, WI 53147 262-949-1931
Insurance products issued or offered by Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, Appleton, WI. Not all products are available in all states. Securities and investment advisory services are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415, a FINRA and SIPC member and a wholly owned subsidiary of Thrivent. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents/ producers of Thrivent. Investment advisory services, including fee-based financial planning services, are available through qualified investment advisor representatives only. For additional important information, visit Thrivent.com/disclosures. Thrivent.com • 800-847-4836
20328 R4-18 337518