Category Archives: Financial Management

Auto Financing and Maintenance Tips

Auto Financing

Purchasing a new vehicle is always an exciting venture. At Alpine Bank we want to help you maximize your buying experience with a trusted and affordable auto loan. Before you start roaming the car lots, glance at our easy auto check list to see what type of vehicle both you and your budget are searching for.

Determine if you want a new or used vehicle.

Many auto dealers today offer both new and used. While new can offer updated technology and the assurance of no prior owners, choosing a used vehicle can drastically diminish cost and offers a comparable quality with moderate mileage.

Decide on a budget and a timeline.

When choosing the right vehicle to purchase, there are many questions to help you research which option may be best on your pocket book in the long run.

-How long do you want to drive this vehicle?

-What does your budget allow you to spend for the down payment and installments?

-When do you need your vehicle by?

-What type of MPG do you need to keep gas costs within your overall budget?

-How long do you want to be paying the loan off? (0-5 years)

With these questions in mind you can better view the credentials needed in the ideal vehicle for you and your family.

Save your down payment.

Speak with one of our experienced lenders to discuss your auto financing needs. It’s great to start saving now, to help secure some money down for your new purchase. When estimating the total cost of your new vehicle be sure to include any maintenance work, tires, or other repairs a car may need.

Talk to us!

If you have any questions or want to begin the process of auto financing, call Alpine Bank at (815) 398-6500 or stop by today. We’re happy to help, and look forward to making your next auto buying dream a reality.

 

Three Rules for Retirement Savings

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

For most of us, saving for retirement is a necessary step in ensuring a comfortable lifestyle as we grow older. Despite competing demands for our money, ultimately we must commit ourselves to saving for retirement.

You likely have an employer sponsored retirement plan at your place of work where you can save a portion of your paycheck directly into an account set aside for your retirement (401k, 403b, SIMPLE). And don’t forget about Individual Retirement Accounts (IRAs). If you do not have a retirement plan at work you might consider regular contributions to an IRA.

Follow three basic rules to boost your retirement savings.

  1. Start Early

Save as much as you can, as soon as you can. The sooner you start, the longer compounding can work in your favor. Don’t assume that you can put off saving for retirement and make up the difference later with larger contributions. Waiting too long to start saving can make it very difficult to catch up. Only a few years could cost you tens of thousands in accumulated savings at retirement age. Start saving today!

  1. Increase Contributions

Sometimes we cannot save as much as we should early in our working years. If you are not saving as much right now, make a plan to increase your contributions each year or every time you receive a raise or promotion. Always be aware of employer matching contributions. Your first goal should be to contribute the amount that will ensure you receive the maximum employer match.

If possible, you should increase your contributions enough over time that you reach the maximum allowable contribution in your plan. Increasing just one or two percent of your pay each year can quickly get you on your way to a savings rate that can make a big difference in reaching your retirement goals.

  1. Don’t Stop

It can be tempting to reduce, or even stop contributing when we change jobs or experience other life changes such as getting married or having children.  It’s easy to stop, but much, much harder to get started again.

We may also feel inclined to stop saving when investment markets take a downturn. Downward trending markets can actually signal a great time to even increase your contributions. By investing consistently through down market cycles, you purchase investments at a lower cost, buying more shares with each dollar, and allowing for greater potential growth of your account in the future.

Reducing or stopping retirement savings in your employer sponsored plan can also reduce employer matching contributions. Make sure you contribute at least enough to receive the maximum match allowed under your plan.

Make saving a priority! By saving what you can now, increasing your contributions over time , and remaining consistent with your current plan, your savings can really add up over time.

The information contained in this article does not constitute tax or investment advice.  The above statements do not include all rules that may impact your contributions and tax benefits. To confirm what options are available to you, please consult your tax advisor or one of our wealth advisors or retirement planning specialists.

Michael St. John, CPA, CRPS® is a Vice President & Retirement Plan Services Manager at Alpine Trust & Investment Group. He has more than 25 years of experience in accounting, income tax and retirement planning.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

Social Security Changes Eliminate Popular Strategies

MGriepentrog_07.15

Michele Griepentrog, CFA, CFP, CSSCS, Vice President & Senior Wealth Advisor

Social Security benefits are more confusing and complex than ever. Our Wealth Advisors are certified in Social Security claiming strategies, trained to assess and analyze the trade-offs of your options.

What Has Changed? Enacted into law on November 2, 2015, the Bipartisan Budget Act of 2015 accomplished several key objectives. The new law extended the nation’s debt limit through 2017, established federal spending limits for two years, avoided draconian across-the-board spending cuts (known in Washington-speak as “sequestration”), and sidestepped yet another threat of a U.S. Government shutdown. Also included were reforms to the Social Security Disability Insurance program to prevent impending cuts next year to disabled recipients and avoidance of a 50% increase in Medicare Part B premiums in 2016 for millions of seniors.

With virtually no opportunity for public comment or hearings, the new law also made significant changes to the Social Security program. These changes, which we discuss below, will impact lucrative claiming options used to increase Social Security monthly income for many married couples under current rules. Some popular strategies were eliminated with the passage of the new law and will become effective in 2016.

How Are Married Couples Affected?

“File & Suspend” and “Restricted Application” strategies were eliminated under the new rules. With a few notable exceptions, this change will primarily affect married couples, families and ex-spouses who are eligible to receive benefits on the primary worker’s record.

“File and Suspend” is a popular claiming strategy which allows a married couple to maximize their combined Social Security benefit. It is frequently integrated with a second strategy, “Restricted Application for Spousal Benefits”. This combination permits dual-income married couples to double dip, increasing the cumulative value of their Social Security benefit during retirement. Here’s how it works:

“File & Suspend” allows a worker to file at full retirement age for his or her Social Security benefit based on their own work record and then voluntarily suspend the benefit. When the spouse (usually the lower earner) reaches full retirement age, a “Restricted Application for Spousal Benefits” is then made. Delaying benefits based on their own work record after their full retirement age is rewarded with a permanent increase in their benefit amount called Delayed Retirement Credits (“DRCs”). This allows the spouse to begin receiving unreduced spousal benefits based on the primary worker’s record and also permits the records both spouses to continue to grow through DRCs. DRCs are equal to 8% per year up to the worker’s maximum age 70 under current rules. By age 70, the couple begins receiving their (much higher) Social Security benefit from their own work records as a result of the DRCs. Current Social Security rules allow a worker’s full retirement age benefit to increase by as much a 32% to age 70 as a result of DRCs.

Although not required to wait until full retirement age, applying at or after full retirement age allows couples maximize their combined Social Security benefit. Applying for benefits prior to full retirement age eliminates the best advantages of this strategy due to the deemed filing rule. The deemed filing rule requires an applicant who is applying for benefits before their own full retirement age to take the larger of all benefits they may be entitled to – and eliminates their ability to pick and choose which benefit they want now and which benefit they wish defer to allow to grow until later.

Assuming the couple has reached their full retirement ages, combining a “File & Suspend” application with the “Restricted Application for Spousal Benefits Only” application can provide a significant increase to a couple’s cumulative Social Security benefit over their lifetimes.

Significant Changes to the File & Suspend Rule

The File & Suspend rule was eliminated under the new rules, with a few exceptions.

  • New Rules: Beginning after April 29, 2016 suspending a benefit (the “suspend” of part of a file & suspend application) will now halt all benefits being paid on a worker’s record until the time the worker chooses to begin receiving benefits. This includes all dependents filing for benefits under the worker’s record – spouses, ex-spouses, and benefits paid to the worker’s children. Prior to the new law, current rules allowed dependents to continue benefits under a worker’s record, even if the worker suspended his or her own benefit to collect valuable DRCs past full retirement age.
  • Exception: For those who already have begun a file & suspend strategy by April 29, 2016, nothing changes due to grandfather provisions in the new law.
  • Exception: The new rules allow a 6-month grace period that began November 2, 2015 for couples to act. Clients who are at least full retirement age by April 29, 2016 remain eligible to file & suspend, but must make a file & suspend application with SSA during this 6-month grace period, which ends of April 29, 2016. By doing so, the client leaves the door open allowing the spouse, if eligible, and qualifying children to receive benefits off the client’s record under the old rules – even after the new law becomes effective.

Significant Changes to Deemed Filing & Restricted Spousal Application Rules

  • New Rule: The new law amended the deemed filing rule. Unless the age exception applies, a spouse filing for a spousal benefit after April 29, 2016 will be deemed to be filing for all benefits without limitation. The option of choosing which benefit, including a restricted application for spousal (and ex-spouse) benefits only while their own benefit continues to grow, will no longer be available under the new rules.
  • Exception: Clients age 62 or older on or before December 31, 2015 are grandfathered in under the old restricted application and deemed filing rules, and are not subject to the new expanded deemed filing rules. Through this age exception only, the restriction application for spousal benefits continues to apply.

Michele A. Griepentrog, CFA, CFP, CSSCS is a Vice President & Senior Wealth Advisor at Alpine Trust & Investment Group. She has more than 27 years of investment management experience.

This is Not a Lehman Moment!

Certainly stock market declines of the nature that we have experienced in the past couple ofStockMarket days are unnerving.  Recollection of the 2007-2009 market decline is very fresh in investors’ minds. It is important to keep these events in perspective. The previous decline was a reaction to a financial system on the brink, a real crisis in confidence in the entire financial system. This is not the case today. In other words, this is not a Lehman moment!

So, what is going on?
>      This is merely a reset of global growth expectations. It’s becoming clear that the global economy, likely in part due to demographics, is going to be in a much slower growth pattern than has historically been the case.
>      If global economic growth is lower, then future earnings growth must be lower too. Earnings are what moves stock prices and that’s why stocks are going lower, to reset to new lower growth expectations.
>      Good news is that U.S. earnings expectations are not very high anyway, however, everyone has been suspicious of China’s reported economic data and given all the actions the government has been taking to stabilize growth, the suspicions are confirmed and China is likely growing slower than previously thought.
>      Market valuation is not at the same high level that it was in 2007, it is much more reasonable.
>      Our economy is still growing steadily. Our largest trading partners are Canada, China, and Mexico. China’s citizens are not heavily involved in their stock market so our exports to China may not even be impacted too much.
>      U.S. new home sales in July were at their highest level since July 2007; auto sales are at best pace in a decade; labor market improved.
>     Europe has become more stable despite Greece’s Prime Minister, Alexis Tsipras’ recent resignation.  European growth is firming, but certainly not robust. Recent Eurozone PMI came in at 54.1, signaling the best expansion in some time for the manufacturing sector.
>     U.S. has gone 1,418 calendar days without a 10% correction, the 3rd longest in the past 50 years. The DOW and S&P 500 have now corrected 10% from their May 2015 highs. 10% corrections are normal and healthy, even though they do not feel very good, especially when they happen as quickly as this one.
>     The Fed has not been clear on its direction and that has spooked markets as well. Market volatility may push off a rate hike until at least December.
>     Most portfolios are diversified and are not fully invested in stocks. Bonds have rallied so that side of your portfolio should have gained in value to help offset equity declines.

Investors in the equity markets know that long term value is achieved only when a long term perspective can be maintained. Volatility like this is difficult to tolerate over the short term but might be easier if the media was as vocal about the gains in your bond portfolio that were serving to mitigate some of the short term equity declines.

Investment and insurance products are: not Alpine Bank products, not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

What to Do with Your Tax Refund

Are you getting some money back from Uncle Sam this year? We have some wise ways you can spend that extra cash.

Are you getting some money back from Uncle Sam this year? We have some wise ways you can spend that extra cash.

Whether you are ready for it or not, tax season is upon us! While this time of year makes most of us want to let out a groan, there is a bright side to remember: you may be getting a refund.

You may want to start looking at making some kind of big purchase with the money, you need to step back and look at the big picture. Getting a tax refund is an opportunity to better your financial situation and make wise decisions. If you just waste the money that you get back, what was the point in getting it back in the first place?

If you’re fortunate enough to receive a tax refund this year, consider putting it towards one of these suggestions from Alpine Bank. These will benefit your family and start you on a good financial path for the rest of the year.

Make home improvements- Whether it is a minor do-it-yourself fix or a major project, keeping your home updated will increase its value and also prevent future problems from occurring. This will mean more cash for you if or when you decide to put your home on the market.

Make extra payments- Making extra payments on your mortgage, credit card debt or loans may not be fun, but it will save you money in the form of less interest down the road. Plus, you will have all of your debts paid off sooner!

Put it away for your kids’ college education- College tuition is always rising and this trend doesn’t look like it will be stopping anytime soon. Consider setting aside some extra money into an education savings account.

Contribute to your retirement fund- If you are looking towards long-term goals, contributing to your retirement account is a good way to ensure that you feel secure when you are done working.

Build your emergency fund- Your emergency fund should have at least three months’ worth of living expenses saved up in it. If you have had to dip into your emergency fund lately, this is the time to start rebuilding it.

Which of these ideas do you think would benefit you most?  If you are looking for some advice about saving now or later down the road, contact Alpine Bank. We would love to talk it over with you!

5 Simple Steps to Organize Your Finances TODAY

 

Keeping your personal finances organized can save you money and stress

Keeping your personal finances organized can save you money and stress.

Are you a purger or a hoarder? Either way, important financial documents are probably being ignored. This can result in late fees, overdraft charges and other costs that could be prevented if an organization system was set in place. Use Get Organized Week as an opportunity to start fresh and try some of these tips from Alpine Bank to organize your personal finances.

  • Choose a system that works for you. There are many free web-based solutions that allow you to record your bills and payments online. Other people choose to use the classic paper and pencil method. Whichever method you choose, commit to it.
  • Get the tools you need. This may mean getting folders to organize each payment into categories such as taxes, credit cards, investments etc. It is important to establish a uniform way to store all of your paper bills and documents to prevent them from being misplaced or ignored.
  • Pay your bills as soon as they come. Getting the payment out of the way helps to prevent papers from piling up on the counter where they can easily be lost or thrown away. Many late fees are charged because the bill was simply forgotten about.
  • When possible, pay bills online or through email. Digital payment systems help cut down the clutter as well as the chances of losing a paper document. An automated payment system can be handy for fixed monthly costs too!
  • Keep everything in one place. Some people choose to organize bills into folders or a single notebook while others scan and save bills into a designated computer file. Even something simple like keeping receipts in a shoebox or designated desk drawer can help keep track of your files. There are many different methods so you can choose which is best for you.

Organizing your finances may seem like a daunting task but once you get in the swing of a certain method, you will notice that it is an easy way to cut back on the clutter and stress that fills your life.

Reduce Your Financial Stress with these 6 Tips

Financial stress relief from Alpine Bank

Learn how to bust financial stress and live a better life free from the worries of money!

Do you fear getting your monthly bank statement? Does it feel like there is a weight on your shoulders any time you think about money? Do you feel hopeless about your current financial situation? If so, you are suffering from financial stress, and you are not alone.

 

A 2013 study by Financial Finesse found that 83 percent of employees report some financial stress, with 16 percent saying it is high or overwhelming. Financial stress’s consequences aren’t limited to your bank account, either; it can translate into physical health symptoms, causing high blood pressure and other health issues.

 

Since May is National Blood Pressure Month, Alpine Bank thinks this is as good a time as any to help you keep your blood pressure in a healthy range by lowering your financial stress levels. Here are a few tips for those of you stressing about your money situation to hopefully get you back on solid ground.

 

  • Look for ways to reduce your debt- is there anything you can sell to help pay down your debt? You can also try refinancing your debt through your creditors, who may give you a better rate if they know you’re looking to refinance.
  • See where your money goes- scour your debit and credit card statements to see where you are racking up the most spending. You can also use free websites like Mint to help, and keep receipts for every purchase you make.
  • Cut costs- once you see where your money is going, see which expenses you can cut or eliminate altogether. Even small savings can add up to a lot over time.
  • Prioritize your spending- make sure the essentials – rent/mortgage, food, utilities, student loans – are covered before you pay down your unsecured debt, such as credit card debt, which can generally be negotiated.
  • Learn to haggle or ask for help- you can try negotiating with your creditors directly or ask a non-profit credit counseling agency for help.
  • Build an emergency fund- having $1,000 in your savings account can go a long way to giving you some peace of mind and reducing your anxiety.

 

Being stressed from your finances can seem like an inescapable trap. However, by creating a logical, step-by-step plan, you can free yourself from the crushing weight of debt and other stressors. Just be aware that it may take some time and lots of willpower to do. If you need help, Alpine Bankwill gladly help in any way we can. We look forward to seeing you soon!

Save Money and Go Green with these 7 Tips

Green living tips from Alpine Bank

Going green can be an easy and frugal change to your lifestyle.

There’s little doubt that spring is a very beautiful time of year here in our part of Illinois. The grass is green, flowers have bloomed, and soon the recently planted fields will start growing in. But nature isn’t the only thing that can get greener this time of year.

 

Your home and how you live are also two things that can “go green” while also helping you save some green. This is a win-win situation, because not only does Alpine Bank advocate smart financial decisions, but also living responsibly in regard to our environment. That’s why we have come up with a few ways you can help out Mother Nature and save a little money as well.

 

Seal up the cracks- this not only keeps cool air in as it warms up, but it also keeps cold air out in the winter. And there’s an added bonus: it can help you save up to 30 percent on your heating and cooling bill

 

Go for a low-flow showerhead- the name says “low-flow” but there doesn’t feel like much difference with most low-flow heads. Also, showerheads with the WaterSense label could save up to 2,900 gallons per year on average.

 

Revamp your thermostat- a programmable thermostat will help you maximize the efficiency of your heating and cooling, meaning less waste and more money in your pocket.

 

Nix the disposable household products- paper plates, paper towels, napkins, aluminum foil, and zipper bags can all be replaced with alternatives that you can use multiple times.

 

Repurpose- before tossing anything out, ask yourself if there is another purpose it could serve. A lot of the time the answer will be “yes.”

 

Buy used- there may be a stigma to buying second-hand goods, but you can’t argue with the savings you’ll find at Goodwill or other thrift stores.

 

Learn how to cook or start a garden- the less takeout or fast food you buy, the fewer wrappers, bags, and other packaging you go through that become trash.

 

Are there other ways you can think of to go green without breaking the bank? Let us know by leaving us a comment on our Facebook page.

 

We hope these ideas have given you some inspiration to look at your home and lifestyle and find areas where you can reduce waste. If you need help increasing your financial efficiency, come by your nearest Alpine Bank office today and we’ll see how we can help. We hope to see you soon!