SafeAmerica Credit Union

2021

• By Lisa

September is Life Insurance Awareness Month!

September serves as Life Insurance Awareness Month. We all want what is best for our families and life insurance provides our loved ones with peace of mind as well as security from any end-of-life and final expenses. Before we begin to learn about what exactly life insurance is and how beneficial it is for our family, let's understand some terminology used in life insurance policies.

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Life Insurance Terms

Administrator: The person (usually the spouse, domestic partner, or close relative) that the court appoints to manage the estate of person who dies with a Will. The administrator is also called the personal representative of the estate.

Beneficiary: The beneficiary of a life insurance policy is the person, organization or trust that you define as receiving the life insurance payout. If you take out a $10,000 policy and name your child the sole beneficiary, when you die, they get $10,000. You can also assign multiple beneficiaries to your policy and define just how much of the policy they’ll receive. For example: John takes out a $25,000 life insurance policy. He names his wife and his two sons as the beneficiaries of his policy, but he specifies that his wife will receive 50% of the payout and each of his sons will receive 25% of the payout. John dies, and his wife gets $12,500, while each son gets $6,250.

Cash Value: For most whole life insurance policies, when you pay your premiums some of that money goes into an investment account. The money in this account is the cash value of that. If you cancel a policy, you can receive the cash value of the policy as payment instead of the face value.

Death Benefit: A death benefit is the money paid upon the death of the insured. It’s usually a payout of the full coverage amount defined in the policy (a $10,000 policy pays a $10,000 death benefit).

Decedent: The person who has passed.

Estate:  All liabilities as well as assets like your home become your "Estate". You would have to take inventory of all things you own and decide how your heirs and creditors would receive assets.

Executor: A person named in a Will and appointed by the court to carry out the dead person's wishes. The executer is also called the personal representative of the estate.

Face Value: The face value of the policy is simply the coverage amount the policy is worth. So, the face value of a $10,000 policy is $10,000. This is usually the same amount as the death benefit.

Living Trust:  A trust set up during the life of a person to distribute money or property to another person or organization.

Personal Representative: The administrator or executor that the court appoints to manage the estate.

Probate: The court process for distributing a dead person's assets, paying debts owed and settling the financial affairs of people when they pass.

Successor: Anyone who has the legal right to receive property of a person who dies, either under the Will or the Probate Code.

Trust: An agreement where property is given to someone to be held for the benefit of another person.

Will: A legal document with Instructions about what will happen to their property after death.

"Do I really need life insurance?"

"If you were to die, would your family struggle to pay for

your funeral, mortgage or daily living expenses?"

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What End of Life Expenses to Expect

A study done by Experian in 2016 determined 73% of Americans are going to die in debt. Unless a family member cosigned with the person who passed, debt is typically not inherited by any of the surviving family members and is paid off by the estate.

What may come out of pocket for the living family members (with no insurance policies in place) may be the following:

  • Funeral Expenses - The California average is about $11,777.  
  • Nursing Home Care/Hospice Care - This can easily reach $1,000 for 24 hour care, BUT Medicaid may be able to cover 100%. 
  • Medical Bills - Depending on medical conditions and treatment, this cost only adds stress to an already difficult time.

"How much life insurance do I really need?"

"The amount of insurance depends on the standard

of living you wish to assure your dependents."

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The Two Basic Types of Life Insurance:

What is Term Life Insurance?
  • Available terms can range from 10 to 30 years 
  • Beneficiaries receive larger death payouts than whole life insurance policies
  • Benefits transfer to beneficiaries tax-free
  • Can easily be converted to Whole Life Insurance
  • Lower payments based on how young you are
  • May be a challenge to renew your policy upon expiration
  • No ability to cash out for end of life expenses
  • Protects your family from a loss of income
  • Temporary policy with an expiration date 
  • Typically costs less than Whole Life Insurance
What is Whole Life Insurance?
  • Burial costs and other final expenses are covered
  • Builds cash value, which could be used while you are alive
  • Coverage will continue as long as payments are made
  • Death Benefits transfer to beneficiaries tax-free
  • Death benefit amount can never decrease
  • The cost (Premiums) do not increase as long as payments are made
  • Smaller death payout
  • Typically higher in cost than Term Life Insurance

"I'm pretty healthy, I'll wait until I am older to get Life Insurance."

"You pay less if you get insurance when you are younger and besides

you'll be covered should any unexpected health issues arise."

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Think of Life Insurance as a Form of Investment

Just as some invest into the stock market and/or the real estate market, whole life policies build cash value through a portion of the money used for premiums through interest. Over time, this sum slowly grows to the point where you can borrow from it tax-free. Keep in mind, you will have to pay interest on this loan and any remaining balance will be deducted from the death benefit your loved ones are set to receive.

If the above-mentioned funds become big enough, you may have the option to trade the policy for an annuity. This would provide you with monthly payments for the rest of your life or when the funds are exhausted. While this may sound like a great idea, you would have to keep in mind, there is a chance your insurance policy will not pay out the death benefit to your loved ones.

Another option available with Whole Life Insurance is being able to surrender (sometimes known as "selling") your policy to the insurance company. By doing so, you void your insurance coverage and while you will get a sum of money, it would not be as much as the amount the insurance company would have paid out when you pass. While thinking of life insurance as an investment, understand this should not replace your savings or 401k.

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How To Pick the Right Policy

Which policy best aligns for your own goals and/or family's goals? When it comes down to figuring out which policy is best, most will initially pay for term life insurance until their career reaches an established point in-which more of their earned money is used towards converting their term policy to whole life.

SafeAmerica Credit Union has partnered with Trustage® Life Insurance to help credit union members like you protect the people who matter most in their lives. Any amount of coverage can make a difference.

TruStage® Life Insurance can help give you peace of mind today and provide an income-tax free cash benefit for your family. It can help pay expenses you might leave behind like funeral costs, mortgage payments or unpaid debts. TruStage helps make it easy to compare insurance and explore options you can afford—so you can make a good decision today for your family:

Get an Instant Quote
Understanding Insurance

TruStage® Life Insurance is offered by TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company, PO Box 61, Waverly IA 50677‑0061. The insurance offered is not a deposit and is not federally insured or guaranteed by your credit union.

© 2020 TruStage Insurance Agency

DTCG-2947101.1

Sources:

https://www.courts.ca.gov

https://www.debt.org

https://educationdata.org

https://www.forbes.com

http://www.insurance.ca.gov

https://www.investopedia.com

https://www.investopedia.com

https://www.trustage.com

https://yahoo.com

• By Lisa

What You Need To Know About The Golden State Stimulus II

By now, you may have heard of a second stimulus payment being dispersed, also known as the Golden State Stimulus II. The payment is expected to reach Californians as early as next week (Week of 9-01-21).

The hot question here has been:

"Will I be receiving any money from this second wave of stimulus checks?"

The Senate Finance Committee released a memo which shared that the qualifications to receive the upcoming Golden State Stimulus II will mirror what was passed under the CARES Act back in March. There are a few factors that come into play regarding qualification for the Golden State Stimulus II.

They are...

  • File your 2020 taxes by October 15, 2021
  • Have a California Adjusted Gross Income (CA AGI) of $1 to $75,000 for the 2020 tax year
  • Have wages of $0 to $75,000 for the 2020 tax year
  • Be a California resident for more than half of the 2020 tax year
  • Be a California resident on the date payment is issued
  • Cannot be claimed as a dependent by another taxpayer (A dependent is a qualifying child or qualifying relative. Visit FTB Publication for more information about a qualifying child and qualifying relative.)

Similar to the first stimulus payment rollout and depending on which delivery option was selected on your 2020 taxes, California can receive payment via direct deposit or a paper check via mail.  Direct deposits are expected to be issued between September 1, 2021 and October 15, 2021.

Paper check timeframes are based on the last 3 digits of the zip code used on your 2020 tax return.

They go as follows:
001-065 10/04/2021 through 10/22/2021
066-221 10/18/2021 through 11/05/2021
222-302 11/1/2021 through 11/19/2021
303-543 11/15/2021 through 12/03/2021
544-709 11/29/2021 through 12/17/2021
710-998 12/13/2021 through 12/31/2021

As a reminder, in order to receive the stimulus payment, make sure to file a complete 2020 tax return by October 15, 2021.

Forbes had released an article back in June of this year with the expectations of US consumers to use the upcoming stimulus checks to further pay down credit card debt, prioritizing accounts with higher interest rates. US Consumers (and specifically our members) must not forget they have the resource to transfer their high interest credit card balances to financial institutions (like SafeAmerica Credit Union) with significantly lower interest rates than the big banks.

Known as a Balance Transfer in the finance industry, this essentially provides instant relief from high interest rates which in turn allows for more funds to be used towards paying down the principal of your loan compared to the big banks.

Taking advantage of any opportunity for saving any amount of the Golden State Stimulus II is ideal for any financial situation and a balance transfer allows just that.

Learn more about SafeAmerica's Balance Transfers and how you can take advantage of this resource by clicking the button below.

Visa Balance Transfer

• By Lisa

National Financial Awareness Day – August 14th

August 14th marks National Financial Awareness Day. This day serves as the perfect opportunity to go over your finances and see what habits could be addressed to provide financial freedom.

The concept of financial education/awareness can be traced back to Benjamin Franklin’s 1737’s Poor Richard’s Almanack. There, Mr. Franklin wrote a column called “Hints For Those That Would Be Rich.”

It was with this article, he coined the phrase and ended his column with “A penny saved is twopence clear.” This piece of advice has somehow been lost through time and has had many people believing Franklin said “A penny saved is a penny earned.” While equally sound advice, some may argue it’s the modern interpretation of what Franklin had originally said.

Read Benjamin Franklin's Article below.

Hints For Those That Would Be Rich

Benjamin Franklin’s “Hints For Those That Would Be Rich” was the closest, formal piece of financial education the American people had at the time. It wasn’t until 1849 where James William Gilbart published his article, “Ten Minutes’ Advice about Keeping a Banker.” Through this, Gilbart shared in detail, the many advantages of having a bank account along with a personal banker.

We’ve come a long way in a short amount of time and with the ease of access regarding information, we can learn timeless financial concepts, habits and tips rather instantly.

Hints For Those Who Are SafeAmerica Members

Just like Mr. Benjamin Franklin wrote his column about financial education back in 1737, SafeAmerica Credit Union too has hints for those that would be rich.

Budgeting For Short And Long Term Goals

Setting a budget and developing a spending plan is a great way to relieve uncertainty and stress while also helping to figure out how to meet both your short-term and long-term financial goals. Use this worksheet to calculate your monthly expenses and income to get an idea of what you have to work with, what your commitments are, and what you have remaining to devote to your goals.

Budgeting your finances allows you to become better prepared for those unwanted and unexpected expenses when they arise (i.e. car maintenance, home repairs, and medical costs). It also allows you to have a “true” budget when it comes to where you are spending.

Understanding Your Credit And How To Build It

From getting approved for a loan to lower interest rates, there are many benefits to improving your credit. Use this tip sheet to learn about the factors that affect your credit score and how you can improve your score (and overall financial health!) Reviewing your credit cards’ limits, interest rates and history put you into a position to space out purchases which would have less of an impact on your overall savings/checking accounts. You may find after your review, you could open a new line of credit to assist with expanding your Credit Utilization, thus improving your credit score. However, you won’t know until your make time to review your credit situation.

Building and maintaining your credit history are both an important part of everyone’s financial journey and having a reliable credit history shows lenders you are capable of making payments and on time. When first starting your credit journey there are a few options one can take to build their credit in a safe and controlled manner with one example being a youth credit card. Establishing and understanding good credit habits especially at an early age allow youth to grow into lives with responsible financial decision making.

Setting Financial Goals

Do you remember the last time you ironed out the details for your next financial goal(s)? Whether it’s for a new car, vacation, home or even education. Understanding how much money needs to be saved allows for a clear path towards reaching your goals all while staying within your budget.

Utilizing Online Banking to Be Aware of your Finances

Online Banking allows you to monitor all your transactions in a safe and timely manner. Your account activity is almost instantly displayed for your review, whether you made a payment, used your debit card, transferred funds or even paid a bill. So many things can be done with online banking, your own monitoring and peace of mind is definitely one of them.

What You Can Do Now

Education.  Financial awareness does not have to be a difficult or daunting task for anyone, especially with the many resources readily available for members to take advantage of.  Through our partnership with GreenPath Financial Wellness, we provide our members financial education, free financial counseling, credit report reviews, student loan counseling, and much more!  We invite you to utilize this free service made available to you as a SafeAmerica Credit Union member.

GreenPath Financial Wellness

Start young.  Being aware of money management, no matter how simple, at an early age can only set you up for success in the future.  You can start the process of teaching your little ones healthy financial habits, as well as becoming even more financially aware yourself, by looking into youth savings programs.  SafeAmerica Credit Union offers a robust youth program that can help them on the path to financial success.

Youth Program

• By Lisa

Increasing Your Financial Awareness: Recorded Webinar

Learning about personal finances can feel overwhelming or out of reach. This webinar recording provides discussion and tips for more easily manage our finances.

What You'll Learn

  • Ways to take control of your finances
  • Money mistakes you can learn from
  • Practical steps to increase your financial awareness

As a member, we provide you with access to certified experts who will empower you to eliminate financial stress, get out of debt, increase savings, and achieve your financial goals.

Click below to learn more on how GreenPath Financial Wellness can play an important role towards your financial freedom.

GreenPath

• By Lisa

How To Raise Financially Healthy Kids

Information brought to you by our partner, GreenPath Financial Wellness

As a parent, you may be wondering what type of conversations you may begin to have in order to develop financially healthy kids. Coming out of the unprecedented year we all endured, it may serve as a good opportunity to begin sharing valuable life-lessons about money.

Here are some tips that will show you how to raise financially healthy kids.

Talk About Money

Let’s change the narrative around money.  You can introduce the concept of money to your kids at an early age.  As your children grow, continue to deepen the conversation and help them understand the concepts of money.

If you're unsure of where to start, you can also ask a trusted friend or family member to have these conversations with your kids.  It’s also ok to let your kids know that you don’t have it all figured out.  Explain the things you’ve done and what you would or wouldn’t do again and why.  Sharing is how we learn!

Involve Your Kids in Major Purchases

Deciding where to go on vacation?  Buying a new appliance?  Include your kids in the process. They can help with the research.  You can show them the factors that go into making the decision.  You can help them compare the options before making the purchase.  Even better, allow your kids to pay for the major purchase.  Imagine how your children will feel knowing they did the research to make the best decision for the entire family.

Teach Your Children Math and Money

Most people don’t learn about budgeting until it’s too late.  Imagine what the future will look like for your children, if you teach them the value of savings today.  Show them how compounding interest works. When you go to the store, could you give your kids a $10 bill and ask them to purchase part of the grocery list?  When could you teach your children about credit?  Could you educate them about how credit cards work before they go to college?

Teach Your Children to Record Their Spending and Saving

Remember the main reason for teaching our children about how to track their spending is to allow them to better understand where their money goes.  More importantly, this allows our children to successfully handle their money and achieve their goals.

Don’t worry, teaching your kids about money doesn’t have to be a daunting task.  If you’re like most people, the hardest thing to do is to start the conversation.  We are here to help.  Share these posts with them, discuss the articles on GreenPath’s site or simply reach out to us for ideas.

GreenPath

SafeAmerica's Youth Program

Set up your children for financial success! Learn about our Youth Program and implement tips from this blog to jumpstart your children with healthy financial habits.

For more financial tips and education, visit GreenPath Financial Wellness.

Youth Program

• By Lisa

What to Know About the Child Tax Credit

Information brought to you by our partner, GreenPath Financial Wellness

Families with dependent children are about to receive advanced payments as part of the American Rescue Plan’s expansion of the Child Tax Credit.

On average, families who claim the Child Tax Credit for 2021 will receive up to $3,000 per qualifying child per year, paid out in monthly installments.  A qualifying child is between 6 and 17 years old at the end of 2021. For those with a qualifying child under age 6 at the end of 2021, they will receive $3,600 per year, paid out in monthly installments.

The official dates for the 2021 monthly direct cash payments are: July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

Families are eligible to receive advance Child Tax Credit payments based on their 2020 tax return or 2019 tax, families generally will receive those payments automatically without needing to take any additional action.

Meal Preparation with kids during COVID-19

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Your Family Budget

Families set to receive the advanced monthly payments starting in July might be weighing what to do with the money. How will the funds best be used? Will you use the payments for immediate family needs? Put it away for any family emergencies that might come up?

A good place to start when it comes to assessing how to use the advanced child tax credits is to look at a family’s entire financial picture. Families might consider asking the following questions:

  • How much does the family have in emergency savings?
  • Does the family have any high-interest debt (credit cards, loans, other debt) to pay off?
  • What other major expenses are coming up and how will the family pay for the them?
  • Does the family have the need for any upcoming home repair, car repair, medical expenses?

The Power of a Plan

Setting a plan can be helpful when it comes to managing these advanced funds.

Advanced payments can be used to make a significant difference in a family’s entire financial situation.  It could be a way to make a major dent in credit card debt, or a way to be able to build some family emergency savings that many struggle to build throughout the year with a paycheck.

To get started, GreenPath offers a simple spending plan worksheet to jump-start the family budgeting process.

To help understand your best options, visit our GreenPath  page to learn how you can receive a free financial counseling session. As an example, some families might want to opt-out of the scheduled advanced payments and instead receive one lump sum child tax payment in 2021. If that payment plan makes sense, people will need to select that option in the IRS online portal.

What’s the best path for your family? When you contact GreenPath, you will be guided through a process to assess your financial picture and create an action plan to address your specific situation when it comes to managing the advanced payments.

GreenPath’s certified, caring counselors listen with respect, offer advice and information, and work with you every step of the way.

For more Financial tips and education, visit GreenPath Financial Wellness.
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