Financial Planning Basics
Taking care of your long-term financial affairs can be one of the easiest things to put off. It often seems that dealing with daily finances and the other activities of everyday life take precedence over the need to create a workable financial plan. Here are some ideas that will help you create a plan that will cover the basics and put you on the road to a secure financial future.
- Develop a financial reserve. Being prepared (with three to six months' living expenses) can help relieve some of the financial anxiety we often feel. Consider an automatic savings plan with some amount being deposited into a savings account from each paycheck. The fund will grow and you may end up not even missing what is saved each month.
- Get rid of high interest rate credit card debt. Interest rates on some credit cards are high. If you are carrying over balances and paying interest, cut down on your card use, pay more than the required monthly minimum and eliminate this expense. Also, you may want to consider a different credit card that offers a lower rate.
- Develop a household budget. This is often one of the most dreaded parts to being financially responsible. To make the process less dreaded, call it a "household spending analysis." Determining how you spend your money will probably lead to identifying how to reduce some expenses. You may want to use some common financial management software (Quicken or Microsoft Money) to help. These relatively inexpensive programs will also help organize your finances and may save you time and money.
- Save for retirement. Your financial lifestyle during retirement is largely dependent on the financial decisions you make before retiring. Social Security and the traditional company defined benefit plans are becoming less important as the responsibility for preparing for a financially secure retirement is shifting to the individual.
Start with your employer’s retirement plan. Many plans, especially 401(k) plans, make it easy to save, offer investment flexibility and enable you to reduce your taxes. Many plans also have provisions for the employer to make contributions on your behalf. Review your plan details, contribute as much as you can and at least contribute enough to get the full employer "match."
If you have taken full advantage of company sponsored plans, and can still afford it, consider contributions to an IRA or Roth IRA. The tax deferred compounding aspects of these plans enable your funds to grow faster.
- Be sensitive to taxes. No one likes to pay more income taxes than absolutely necessary. Be aware of the opportunity of deducting certain items like mortgage interest, state and local taxes, charitable contributions and certain medical expenses. Also, consider the preferential tax treatment from capital gains on your investments.
- Have a sensible investment strategy. Start with an asset allocation goal that divides your investments into equity, fixed income and cash investment categories. Your initial asset allocation should be based on your time horizon (age) and how you feel about taking risks. The younger you are and the more comfortable you feel with risk, allocating a larger portion of your funds to equities may help you earn the higher returns of stocks that have historically been available. However, remember that all investments involve risk and that past performance is no guarantee of future results.
- Be adequately protected. Insurance provides protection against the unknown. Make sure your possessions, life and health are adequately insured. Examine the level of deductibles and the coverage amounts to get the protection you need at the lowest cost.
- Take care of estate planning. Having a well thought out will can ensure that your assets are distributed as you desire upon your death and can help reduce any estate taxes that may be due. But estate planning is more than reducing taxes. Your estate plan should include documents that designate someone to make financial decisions if you are incapable of making them (durable power of attorney for finances) and that designate someone to make medical decisions if you are incapacitated (durable power of attorney for health care).
- Finally, organize your records. Having a system for handling monthly expenses can reduce the stress and time needed to handle your everyday finances. Using a system to keep track of investment and tax records will make every tax season less "taxing." Keep other important information organized. Having to hunt for the name of your insurance agent, an account number, a frequent flyer number or any other bit of information can be a waste of time.
What is a Routing Number?
FAIRWINDS' routing number (263181368) is used to identify FAIRWINDS Credit Union from other financial institutions and in no way identifies you or your accounts to others.
A routing transit number (RTN) is a nine digit bank code, used in the United States, to facilitate the sorting, bundling, and shipment of paper checks back to the drawer's (check writer's) account.
The RTN is also used by Federal Reserve Banks to process Fedwire funds transfers, and by the Automated Clearing House (ACH) to process direct deposits, bill payments, and other such automated transfers.
What can I do with my Relationship Rewards points?
Relationship Rewards provide you the opportunity to enjoy special member benefits including:
- Buying down the interest rate on a loan.
- Increasing your rate on a new CD.
- Reducing service charges on additional products and services.
How do I send or receive a wire?
To send a wire from FAIRWINDS, please provide the following:
- Name, address and routing number of financial institution receiving the wire
- Account number for the receiving account
- Name and address of receiving account holder
There is a $20.00 service charge for an outgoing domestic wire from a personal account and a $25.00 service charge for an outgoing wire from a business account.
To receive a wire at the credit union, you will need to provide the following:
- FAIRWINDS routing number (263-181-368)
- Name of account holder
- FAIRWINDS account number to receive the funds
There is a $10.00 service charge for an incoming domestic wire to a personal account and $15.00 service charge for an incoming wire to a business account.
*Please verify this information with the receiving financial institution as there may be an intermediary financial instititution involved.
When should I expect my 5498-ESA tax forms?
5498-ESA tax forms will be mailed by April 30th for all Coverdell Educational Savings Account owners who made contributions and/or rollovers into their ESA's in 2011.
5498 and 5498-SA tax forms will be mailed in mid-May for all Traditional, SEP, and Roth IRA owners and Health Savings Account owners who made contributions and/or rollovers into their IRA's and HSA's in 2011.
For questions regarding the 5498 forms please call Member Services at 407-277-5045 or visit your local branch.
When should I expect my tax forms?
FAIRWINDS mails 1099-INT and 1098 tax forms at the end of January. However, if you have e-Statements, these tax forms are available online right now!
Learn more here.
Members will only receive a 1099-INT form if the aggregate earnings amongst the accounts they are tax reported for (the primary owner) have earned at least $10 in interest.
These accounts include:
Savings, checking, money market, certificates of deposit, and US Bonds Redeemed, but do not include IRA accounts. If members have not earned at least $10 in interest, they will not receive a 1099-INT form.
Members will only receive a 1098 Mortgage Interest Statement if they paid $600 or more in interest on their mortgage.
FAIRWINDS mails 1099-R, 1099-Q, 1099-SA, and FMV/RMD statements to members by January 31st each year. We also mail 5498, 5498-SA, and 5498 ESA forms to members by the end of May.
Important information for all MasterCard® and VISA® credit and debit card holders.
You may have seen news stories recently about a potential data breach with MasterCard® and VISA® through a third-party payment processor. While there is no indication that any FAIRWINDS members have been impacted by this event, it is an opportunity to remind all consumers about the importance of being diligent, safeguarding your personal information and monitoring your accounts on a regular basis to minimize the effects of fraud.
Take the few extra steps to proactively protect your accounts. If you believe your credit or debit card information is at risk or unauthorized transactions have posted to your account, contact your financial institution immediately. In addition, you may want to consider looking into an identity theft alert program to keep you informed of activity on your accounts. There are many reputable programs available, including ID Secure. Click here to learn more.
There is an active texting scam occurring in the Central Florida area.
People are receiving a text at random stating their "card has been deactivated." This is a Scam!
Always remember, FAIRWINDS will never ask members to provide confidential information, such as debit or credit card numbers, PINs or Social Security numbers via email, text messages, direct mail or over the phone.
If you feel you are the victim of account fraud or identify theft, act immediately. This should help minimize the damage to your personal accounts and credit rating. Click here to learn more.
What are the 2013 IRA and HSA contribution limits?
Traditional and Roth IRA owners under age 50 may contribute up to $5,500 toward tax year 2013. A $1,000 catch up contribution may be added for Traditional and Roth IRA owners age 50 and over.
2013 SEP contribution limits have increased to a maximum of $51,000 or 25% of the employee's compensation, whichever is less.
HSA owners under age 55 with an individual HDHP (self coverage only) may contribute up to $3,250 toward tax year 2013. HSA owners under age 55 with a family HDHP may contribute up to $6,450 toward tax year 2013. A $1,000 catch up contribution may be added for HSA owners age 55 and over.
When will I receive my 2012 5498 form?
5498, 5498-SA, and 5498-ESA forms report IRA, HSA, and ESA contributions, rollovers, conversions, and fair market value (December 31st balance) information to the IRS and account owners. 5498 and 5498-SA forms are expected to be mailed by Saturday, May 18th.
Please contact Member Services at (407) 277-5045 or visit your local branch if you have questions about your form(s).
How can I make a prior year (2012) contribution to my IRA or HSA?
Eligible prior year (2012) IRA and HSA contributions may be made through the close of business on Monday, April 15th. The IRS requires signed documentation before contributions may be designated for a prior year.
Members can accomplish this by visiting a local branch during business hours or by submitting an e-Signed form through Retirement Central® and click Manage An Account on the left menu.