R‪ice co financial guide 2018 by Kate Noet

Financial Guide RICE COUNTY

February 2018 | Faribault Daily News | Northfield News

Inside The Tax Cuts and Jobs Act (TCJA) Getting Financially Fit in the Next Four Years What Should You Do With Your Tax Refund? How Much Should One Spend on a House?

and more

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RICE COUNTY FINANCIAL GUIDE

February 2018

When It Comes to Your To-do List,

Put Your Future First When It Comes to Your To-do List, WhenYour It ComesFuture to Your To-do List, Put First

Put Your Future First

As an Edward Jones client, you’re the type of person who wants to stay on top of your finances. But decisions made in the past may no longer be what’s best for your future. Markets and interest rates may have changed, but more importantly, your When Comes to Yourwants To-do List, As an Edward Jones client, you’re the type of Itperson who to stay on top of goals may have changed. A financial review is a great opportunity to sit face to face Your First your finances. decisions made intype the Put past may who noFuture longer be what’s best As an Edward But Jones client, you’re the of person wants to stay on top offor your with your financial advisor to help ensure that your strategy is up-to-date. Regular your finances. the have past may no longer what’s best for your future. MarketsBut anddecisions interestmade rates in may changed, but be more importantly, your reviews can help put your finances in line with your short- and long-term goals. future. Markets interestArates may have changed, but opportunity more importantly, goals may have and changed. financial review is a great to sityour face to face As an Edward Jones client, you’re the type of person who wants to stay on top of

your finances. But decisions made in the past no longer what’s best for your goals mayfinancial have changed. A to financial review is a great sitmayface to beface with your advisor help ensure that youropportunity strategy is to up-to-date. Regular future. Markets and interest rates may have changed, but more importantly, your

with your financial advisor to help ensure thatgoals your strategy up-to-date. may have changed. Ais review is a greatRegular opportunity to sit face to face reviews can help put your finances in line with your short-financial and long-term goals. with your financial advisor to help ensure that your strategy is up-to-date. Regular reviews can help put your finances in line withreviews your short- and long-term goals. can help put your finances in line with your short- and long-term goals.

To find out more about how to review your financial goals and keep them on track, call today. To find out more about how to review your financial goals and keep them on track, call today.

Tom Klemer more abouthow howto toreview review your financial goals Faribault To Northfield Tom Klemer Tofind findout out more about your financial goals and and keepkeep Advisor Tom Klemer them on Financial Greg Lee Greg Pierce, CRPC® call today. today. Christian Lockner, ChFC® them on track, track, call Financial Advisor .

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February 2018

RICE COUNTY FINANCIAL GUIDE

What Should You Do With Your Tax Refund? BY Tom Klemer Edward Jones Faribault Office You may not get much of a thrill from filing your taxes, but the process becomes much more enjoyable if you’re expecting a refund. So, if one is headed your way, what should you do with the money? The answer depends somewhat on the size of the refund. For the 2017 tax year, the average refund was about $2,760 – not a fortune, but big enough to make an impact in your life. Suppose, for example, that you invested this amount in a tax-deferred vehicle, such as a traditional IRA, and then did not add another penny to it for 30 years. At the end of that time, assuming a hypothetical 7 percent annual rate of return, you’d have slightly more than $21,000 – not enough, by itself, to allow you to move to a Caribbean island, but still a nice addition to your retirement income. (You will need to pay taxes on your withdrawals eventually, unless the money was invested in a Roth IRA, in which case withdrawals are tax-free, provided you meet certain conditions.)

Of course, you don’t have to wait 30 years before you see any benefits from your tax refund. If you did decide to put a $2,760 tax refund toward your IRA for 2018, you’d already have reached just over half the allowable contribution limit of $5,500. (If you’re 50 or older, the limit is $6,500.) By getting such a strong head start on funding your IRA for the year, you’ll give your money more time to grow. Also, if you’re going to “max out” on your IRA, your large initial payment will enable you to put in smaller monthly amounts than you might need to contribute otherwise. While using your refund to help fund your IRA is a good move, it’s not the only one you can make. Here are a few other possibilities: • Pay down some debt. At some time or another, most of us probably feel we’re carrying too much debt. If you can use your tax refund to help reduce your monthly debt payments, you’ll improve your cash flow and possibly have more money available to invest for the future. • Build an emergency fund. If you needed a new furnace or major car repair, or faced any other large, unexpected expense, how

Financial Guide

would you pay for it? If you did not have the cash readily available, you might be forced to dip into your long-term investments. To help avoid this problem, you could create an emergency fund containing three to six months’ worth of living expenses, with the money kept in a liquid, lowrisk account. Your tax refund could help build your emergency fund. • Look for other investment opportunities. If you have some gaps in your portfolio, or some opportunities to improve your overall diversification, you might want to use your tax refund to add some new investments. The more diversified your portfolio, the stronger your defense against market volatility that might primarily affect one particular asset class. (However, diversification, by itself, can’t protect against all losses or guarantee profits.) Clearly, a tax refund gives you a chance to improve your overall financial picture. So take your time, evaluate your options and use the money wisely. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

RICE COUNTY

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Rice County Financial Guide, February 2018 is distributed to subscribers and readers of the Northﬁeld News and Faribault Daily News at no additional charge. All advertising contained herein is the responsibility of the advertisers. All rights reserved. ©2018.

PAGE 3

How Much Should One Spend on a House? BY Leigh Jefferies Edina Realty Northfield Office There are many factors to consider when purchasing a home. First, it would be wise to consider how much you should spend on a home or, rather, ask yourself how much you can afford to spend? Are you paying cash or do you need to get a loan? How much money do you have for closing costs and do you have a down payment? If you are paying cash, then spend as much as you are comfortable with providing that your Realtor Can justify the price with recently sold, comparable homes. If you need to obtain a loan, your monthly payment would have to cover principal, interest, taxes and home owner’s insur-

ance as well As private mortgage insurance if you have less than a 20% down payment. If you plan to purchase a condominium or a town home, then you may also have monthly association dues to factor in. Many Loan Officers would agree that only 30%of a home buyer’s income should be cal-

culated for a monthly mortgage payment. Many Lending Institutions like to see at least two years steady income with both full time and part time employment factored in. Other sources of income may also be included such as child support. Your Loan Of-

HOUSE

Continued on page 5

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RICE COUNTY FINANCIAL GUIDE

February 2018

Getting Financially Fit in the Next Four Years

BY Daniel Hummel you have any life changes in the Farm Bureau Financial Services next four years that could impact Northfield Office either your score or your debts? Finally, organize all of your Take a moment to think account information into several about your financial goals for secure folders so you can easily the next four years. Do you want access all of your accounts when to be debt free, saving more for you have an issue that needs to retirement or working toward be resolved. a feasible budget? Where might you be? What could you be ac- 2. Arrange Financial Check-Ups complishing? How will your life If it’s possible, try to connect with change? As you think through any/all financial planners that your aspirations, consider what you and your family might have. you could accomplish financially Set regular annual or quarterly in four years. Regardless of what meetings to review your budget stage of life you’re in, the next and savings or other goals. If you four years can have a positive im- do not have a financial planner, pact on reaching your budgeting then consider setting a calendar goals. Here are four steps to get alert or reminder on your phone. When the alert pops up, compare you started. your current funds, debt, savings 1. Analyze Your Current Financial or retirement with those smaller benchmark goals. Note your Situation The first step is to analyze progress and identify any room your current finances. Make for improvement. Don’t forget about conducta full list of monthly expenses that are fixed (such as rent, gro- ing an annual insurance review ceries and utilities) and others with your agent. Many people that are variable (entertainment, don’t have nearly enough covergifts, clothing). Subtract this list age, while others are paying too from your total monthly income. much for the coverage that they Make a calendar schedule of have. when every fixed expense is due and when your income will clear 3. What are Achievable Financial your bank account so that you Goals? Now that you’ve analyzed can create a proper budget that takes your cash flow into effect. your current financial situation In this step, you should also and met with your financial proanalyze your current credit score fessionals, you can choose a few and any outstanding debts. Will big picture financial goals that

you’d like to focus on in the next four years. When you set financial goals it gives your family a time to sit down and review priorities. If you agree to work toward a common cause the result you can accomplish things with less resistance and more teamwork. Setting monetary goals works to keep you accountable and ensures that no misconceptions exist about how money should be spent and saved in the next four years. Consider some of these goal options.

Get out of debt Becoming debt free means that you’ll have full control over your income – and that’s an incredible feeling. Not only will you have more for spending, but more for saving and investing as well. It will free your mind of the worry and stress that come with debt. Work with a financial professional to create a reasonable and achievable plan to reduce your debt in the next four years. Plan for early retirement If you’re a millennial or in Generation X, reaching your retirement goals may take longer than you think. Planning to retire by 55, instead of 65, will give you some buffer time in case you hit snags in your savings plan. Although you may not want to fully retire early, you may decide

that you would like to downshift and not work so hard. Start by making small changes to live within your means so that you can begin saving some money each month. Even small amounts of money, if invested early on, can grow to an impressive amount with time. If you save $100 a month, that could grow to $31,644 in 16 years, assuming a 4% rate of compound interest. Retirement options are very different than they were even eight years ago. You don’t need a lot of money to get started; what’s more important is that you start now and use a financial professional to help you along the way. It’s better to be able to retire early and not need to, than to need to retire early and not be able to. Have well-stocked emergency fund An emergency fund is a stash of money set aside to cover the financial surprises life throws your way. These unexpected events can be stressful and costly. An emergency fund can take away a lot of the money worries that you have, since you know that you will always have a reserve should you get into a tight spot. An emergency fund also provides you with an intermediate funding source – a kind of halfway point between your paycheck and your investment ac-

T h e s a v in g s y o u w a n t, th e c o v e r a g e y o u d e s e r v e .

counts – that you can use so that you don’t have to disturb your long-term investments. Having a fund that covers at least 3-6 months of your income is recommended, but more never hurts! The ideal emergency savings goal might be as little as three months or as much as two years of expenses, financial advisors say. It all depends on your personal situation.

Create a business succession plan Do you have a family business? It may have been in the family for generations, or it may be a recent start-up. Either way, you did loads of small business planning when you started it. But the question is inevitable: who will continue building the legacy and growing your small business? The fact is, only 30 percent of small business owners have a business succession plan. If you’re not sure how to get started, read these five tips to help ensure that handing off your business will be as smooth of a process as possible. 4. Manage Your Money Carefully By Tracking Your Progress As with any goal setting, it is important to monitor your progress and measure your results. Doing so will help you determine if the strategies you are using are working. There are countless tools,

template spreadsheets and ideas to keep track of your personal finances, but what works for you is as unique as your goal. The important thing is to keep yourself motivated. You can do this by setting “check-in” appointments with yourself every six months, by discussing your progress with an accountable partner like a spouse, or giving yourself a visual reminder of your goal in a home office or library. No matter where the next four years will take you, make sure to use these four steps to get financially fit.

Sources: ht t p : / / mone y. u sne w s . com/money/blogs/onretirement/2015/08/24/6-retirement-tips-for-millennials http:// www.goodfinancialcents.com/ good-financial-goals/

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February 2018

RICE COUNTY FINANCIAL GUIDE

PAGE 5

The Tax Cuts and Jobs Act (TCJA) By Eric Craig, CPA on or after September 27th, 2017 follows: The bill retains the seven Judd, Ostermann, & Demro, qualify for 100% bonus depreciation which can now be applied to tax brackets, but lowers most of Ltd. either new or used assets. Previ- the tax rates. It also changes the The largest piece of tax reform legislation in more than three decades has recently become law. The bill will affect the taxes of most taxpayers, but very few of the provisions will affect 2017 tax returns. Many of the individual tax changes are effective January 1st, 2018 and are set to expire on December 31st, 2025. This differs from many of the business provisions which are permanent changes. Items affecting tax year 2017: One item effective for 2017 is the ability to deduct medical expenses. The threshold for deducting medical expenses has been decreased to 7.5% of adjusted gross income (AGI) from the current 10%. This is effective for expenses paid on or after January 1st, 2017 through 2018. Beginning on December 15th, 2017 home mortgage interest is only deductible on mortgage debt of $750,000 or less. This limit replaces the former figure of $1 million for acquisition debt and $100,000 for home equity debt. Loans made before December 15th, 2017 are grandfathered therefore the $1 million limit will still apply. The new law also eliminates the deduction for home equity debt entirely beginning in 2018. Business assets purchased

HOUSE

Continued from page 3 ficer may also pull a credit report and do a debt to income ratio calculation. Please also keep in mind that your Realtor and your Loan Officer may suggest asking that the seller to pay for your closing costs. These stipulations may vary from Lending Institution to Institution. When it is all said and done, you Loan Officer will be able to tell you how much you should or may spend to buy a home and how much your

ous law required assets qualifying for bonus depreciation to be new. Highlights of the individual tax law changes beginning in 2018 are as

be: 10%, 12%, 22%, 24%, 32%, ent. This is effective for divorce or separations executed after De35% and 37% cember 31, 2018. Existing agreeThe act increases the stan- ments will be grandfathered in dard deduction for individual and therefore will not change. The individual mandate imtaxpayers to $24,000 for those married filing jointly, $18,000 for posing a penalty on certain taxheads of household, and $12,000 payers for failing to obtain health for all other individuals. Addi- insurance has been repealed eftionally, the act repeals all per- fective for years after 2018. This means the penalty is still in effect sonal exemptions. The new law doubles the for tax years 2017 and 2018 barchild tax credit by providing ring additional legislation. $2,000 per qualifying child. The refundable portion of the credit The legislation also includes many is set at $1,400. A new nonre- new provisions for businesses infundable $500 credit is available cluding sole proprietors, corporafor qualifying dependents who tions, and partnerships. Some of are not qualifying children. The the highlights are as follows: The act replaced the graduthreshold at which the credit begins to phase out was increased ated corporate tax rate, which to $400,000 for married tax- topped out at 35%, with a flat payers filing a joint return and rate of 21%. The new rate took effect Jan. 1, 2018 and applies to $200,000 for other taxpayers. Charitable contributions C-Corporations in general. For tax years 2018 through can now be deducted up to 60% of AGI, up from the previous 2025, individuals will be able to limit of 50% of AGI. The deduction for state and local taxes including real estate taxes is limited to $10,000 ($5,000 for married taxpayers filing separately). Miscellaneous itemized deductions including unreimbursed employee business expenses will not be deductible beginning in 2018. This is the same income thresholds at which the for moving expenses other than exceptions for members of the rates apply. military. • Alimony will no longer be are: 10%, 15%, 25%, 28%, 33%, deductible by the payer or in35% and 39.6% cludible as income by the recipi•

monthly mortgage payment will help you proceed with ease in dream home or investment propbe based on your down payment the process of looking for your erty! amount, closing cost availability, credit history, income and the going interest rate. At any rate, it saves a lot of Hafemeyer Law Office Can Help. time and eliminates doubt and confusion when you make your We offer Free 30 minute consultations to determine whether bankruptcy is right for you. first step in buying a home, a trip to the Mortgage Consultant/Loan Officer at your favorite Lending Institution/Bank or Credit Union. You may then 315 Central Ave. Faribault proceed with confidence in conLaw Office, P.A. 507-384-3215 tacting your experienced, honest hafemeyerlaw.com “Dedicated to providing exceptional service” and effective Realtor who may

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deduct 20% of “qualified business income” from a partnership, S corporation, or sole proprietorship. A limitation on the deduction is phased in based on W-2 wages above a threshold amount of taxable income. This is a general description of this provision and additional limits and thresholds will apply. In conclusion: This is a landmark piece of tax legislation with details and clarification forthcoming. The American Institute of CPAs has identified 39 areas in which practitioners need immediate guidance. The information contained in this article is a brief summary of this legislation. To learn more about the provisions of the new tax legislation and how they affect you, please consult any of our qualified tax professionals.

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RICE COUNTY FINANCIAL GUIDE

February 2018

Online banking safety tips (Metro) In the digital era, many errands that once required leaving the house can be conducted from the comforts of home. Groceries can be ordered online and delivered to consumers’ doorsteps, while bills can be paid online, saving men and women from having to drive to their nearby post office. Online banking has revolutionized the way people manage their money. Investors can buy or sell stocks with the click of a mouse, and money can be moved across accounts just as easily and instantly. Many consumers now even do their banking on their mobile phones. In fact, a 2016 study from the Federal Reserve found that 67 percent of millennials use mobile banking, suggesting that mobile banking is the wave of the future. While online or mobile banking makes it easy for con-

sumers to manage their money, it’s also potentially much riskier than in-person banking at the bank. Unseen hackers and thieves are lurking online and in places where Wi-Fi is open and free, so online and mobile banking enthusiasts must exercise caution when accessing their accounts. • credit card companies now provide two-factor authentication, and some may even insist their customers use it. Two-factor authentication requires two forms of verification before users can log into their accounts. The first might be the traditional username and password, while the second might be a temporary code texted or emailed to users after they log into their accounts.

and slow, but it’s an effective safety measure that should only delay online or mobile banking by a few seconds. • connections. Public Wi-Fi can be convenient, but consumers should never use such connections to do their online or mobile banking. The American Bankers Association suggests consumers always do their online banking via their own private home networks. Consumers who routinely use public Wi-Fi, even if it’s just for basic internet surfing, should log out of mobile banking apps or websites before logging on to public networks. • quently and avoid using the same password for more than one account. Many banking websites advise customers if their passwords are weak or strong when customers first set up their ac-

counts. Even if customers’ passwords are deemed strong, it’s best to change them periodically so hackers or criminals cannot guess them. And consumers should never use the same password for more than one account, as that can make it much easier for criminals to steal consumers’ identities. •

Consumers have the right to one free credit report each year, but many credit card companies now update customers regarding their credit scores once per month. Consumers many need to sign up to take advantage of this service, but doing so is typically free. If credit scores suddenly dip unexpectedly and without reason, consumers may have

been victimized by identity theft and can then take the necessary course of action to address the issue.

cle does not have to be a complicated process. But too often private sellers struggle to sell their vehicles because they are unsure of how to do so. A little information on the selling process can make it easy to unload vehicles quickly and at the prices sellers desire.

ibles, classic cars or those with special features may take longer to move and will have to be priced accordingly.

mentation on their vehicles. For those who can’t find receipts, ask for such receipts where the vehicle was serviced. According to Kelley Blue Book, proof of regular oil changes and other services can be a good selling point because it shows that the seller maintained the vehicle to the best of his or her ability. It could be worth the investment to pull the CarFax¨ report on the vehicle as well to see how it measures up. formation as well. The Department of Motor Vehicles also suggests gathering a release of liability form to keep sellers from being liable for any damages incurred after the vehicle is sold; warranty docu-

Online and mobile banking is convenient, but consumers must tread carefully when accessing sensitive financial information online.

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1. Know the market. The experts at Edmunds say sellers should research the marAgent AgentPhoto Photo Logo Logo ket before putting their vehicles Surrender of the contract may be subject to surrender charges. Withdrawals before age 59 may result in a Disclosure up for sale. Compare the prices IRS penalty tax. Additionally, there is a charge for the Simple7 Income Rider once it is activated. Farm Daniel J. Pumper Agency Daniel J.10% Pumper Agency Bureau Life Insurance Company*/West Des Moines, IA. *Company provider of Farm Bureau Financial Services A141 (3-16) of similar makes and models, Surrender of theSurrender contract may be subject of the to surrender contract charges.may Withdrawals be before subject age 59 to may surrender result in a charges. Withdrawals before age 59 may result in a Disclosure Disclosure and track whether those vehicles 10% IRS penalty 10% tax. Additionally, IRS penalty there is a charge tax. forAdditionally, the Simple7 Income Rider there once itis is activated. a charge Farm for the Simple7 Income Rider once it is activated. Farm Logoof Farm Bureau Financial Services Bureau Life Insurance Bureau Company*/West Life Insurance Des Moines, IA. *Company Company*/West provider of Farm Bureau Des Financial Moines, Services IA. *Company provider A141 (3-16) A141 (3-16) are moving quickly. Cars that are Logo hot commodities will sell relaDaniel J. Pumper Agency Daniel J. Pumper Agency tively quickly. Even though these 1 Surrender of the contract may be subject to surrender charges. Withdrawals before age 591/2 may result in a 10% may not be the flashy vehicles, IRS penalty tax. Additionally, thereSurrender is a charge the Simple7 Income Rider once it is activated. of thefor contract may be subject to surrender charges. WithdrawalsFarm beforeBureau age 59 Life may result in a Disclosure family sedans, trucks and vans Surrender of the contract may be subject to surrender charges. Withdrawals before age 59 may result in a Disclosure Insurance Company*/West Des Moines, *Company provider of is Farm BureautheFinancial Services 10% IRS IA. penalty Additionally, there a charge Income 10% IRS penalty tax. Additionally, there is atax. charge for the Simple7 Income Riderfor once it Simple7 is activated. Farm Rider once it is activated. Farm Bureau Life Insurance Company*/West Des Moines, IA.Bureau *Company provider of Farm Bureau Financial Services A141 (3-16) tend to turn over fast. ConvertBureau Life Insurance Company*/West Des Moines, IA. *Company provider of Farm Financial Services 1

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2. Determine the vehicle’s worth. Just because sellers want to get predetermined amounts for their vehicles doesn’t mean those figures are the going rates for their cars and trucks. Using resources like Kelley Blue Book, NADA Guides and Autotrader. com can help sellers determine the value of their rides according to factors such as mileage, age, model, and condition of the vehicle. 3. Gather receipts and other paperwork.

CAR

their files to unearth maintenance receipts and other docu- Continued on page 8

February 2018

RICE COUNTY FINANCIAL GUIDE

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What You Need To Know About Life Insurance BY Daniel Hummel as a mortgage, continuing a famFarm Bureau Financial Services ily business, higher education for Northfield Office children and many other situations. Beneficiaries generally pay Life insurance can seem like no federal income tax on death a complicated topic, making it benefits. easy to put off until later down the road. However, it’s important 2. Paying for Chronic or Terminal to understand your life insurance Illness options and its advantages from There is a common misconthe get-go. After all, there are ception that life insurance is only benefits to getting started early useful after a person has passed in life! away. But, in reality, some poliAccording to the 2016 In- cies have optional benefits that surance Barometer Study, 9 in can help pay for chronic or ter10 individuals agree that most minal illness care expenses. people need life insurance, but only 60% have it. Furthermore, 3. Access to the Cash Value according to Life Happens, 4 in If you purchase whole life 10 Americans haven’t bought life insurance you will generally be insurance because they’re un- able to access your life insurance aware of how much to buy. cash value through a policy loan or withdrawal for emergencies, What is Life Insurance? retirement income and more. Essentially, life Insurance You have the flexibility to access is protection for your family in your accumulated cash without the event of a tragedy. It can help the restrictions that other investlower the financial risks your ments may carry. family faces in the event you can no longer provide for them. 4. Leaving a Legacy It is designed to make sure your With a life insurance policy, loved ones are taken care of, even you can create additional wealth after you’re gone. for your family or a charity you When you purchase a life want to support. This is an excelinsurance policy, you pay premi- lent tool for building the funds ums on a periodic basis. Then, you need to make an impactful upon the death of the insured, a donation to community organilump-sum is paid to the benefi- zations that are important to you. ciaries. There are many different types of life insurance with mul- Life Insurance Needs at Every tiple add-on options, so policies Stage of Life can be customized to match your personal needs and goals. Young Adult At this point, you may be Buying life insurance when asking yourself, “Why do I need you’re young and healthy is the life insurance?” Before digging best time to get started, as you into the details of the different will likely have access to lower types of life insurance, it’s help- rates because of that good health. ful to understand the benefits of Life insurance needs are unique having life insurance and how it to every individual but, in gencan help protect your family in eral, life insurance becomes the the long run. most critical when you have young children. This is when it Beneﬁts of Life Insurance becomes especially important to build assets that can protect your 1. Safety and Security for Your family if something should hapLoved Ones pen to you. Ensuring the safety and seHowever, even if you don’t curity of loved ones is the prima- have children, life insurance can ry reason many people purchase be a smart financial move. Many life insurance. In addition to whole life policies provide not covering funeral costs, life insur- only a death benefit but also alance can provide income to pay low you to use your accumulated expenses after you’re gone, such cash value to fund future finan-

cial objectives, such as buying a home or retirement.

Thirties, Forties and Fifties At this age, your children may be grown and out of the house and they may not need as much financial support as they once did. However, there are other factors to consider at this point in your life. Do you have a spouse who you financially support? Do you provide financial support or plan to provide financial support for an aging parent or a dependent? Sure, you are growing your assets in a 401k or another retirement fund, but will that be enough? Consider the financial implications of the loss of your income on your family when deciding which type of life insurance is best for you. Seniors Many retirees no longer have dependents, and may think they don’t need life insurance anymore. For some people, this could be the case, but you should never cancel a policy without first discussing it with your insurance agent or a financial advisor. They can help you understand what other options may be available to you. Common Types of Life Insurance There are different types of life insurance with many additional options available. Here are the most common types of life insurance you’re likely to hear about as you begin your search for the right coverage. Permanent Life Insurance Both whole and universal policies are types of permanent life insurance. These policies typically have two components: cash value accumulation and insurance. Permanent life insurance policies are designed to be kept for a lifetime. With permanent life insurance you may pay slightly higher premiums than with a term policy, but remember you’re earning cash value with your premium dollars and you have coverage for life. Whole Life Insurance Whole life insurance pro-

vides guaranteed protection for your whole life. As a policyholder you’ll pay consistent premiums and have guaranteed cash

value accumulation. Whole life insurance is ideal for those with long-term goals. You also have the option to borrow from your Continued on page 9

LIFE

MAP OUT YOUR Legacy

INVESTMENT FUTURE!

See Chris for help with a financial plan that is tailored to fit your needs, goals and objectives.

Retirement Income

Retirement Accumulation

College Savings

Make an appointment today!

Chris Weber, CFP® Investment Executive

Securities and insurance products are offered through Cetera Investment Services LLC member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency.

507-645-1841 chris.weber@ceterais.com 1605 Heritage Dr, Northfield, MN 55057

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RICE COUNTY FINANCIAL GUIDE

7 ways to save on food

(Metro) Food is a necessity and an expense that simply cannot be avoided. A 2012 Gallup poll found that Americans reported spending $151 on food per week. Around one in 10 said they spent $300 or more per week, and those with higher incomes tend to spend more on weekly food bills than people who earn less. Compounding high food bills is the fact that people tend to waste food. According to the American Chemistry Council, roughly 80 billion pounds of food are thrown out every year in the United States. Britons throw away around seven million tons of food and drink per year, says BBC Good Food. Saving money on food may seem challenging, but it doesn’t have to be. With some smart strategies, individuals can reduce their food budgets and still have enough to eat. 1. Store food properly. Pay attention to the correct ways to

you changing jobs? Do you have a 401(k)?

ne,

February 2018

store food, including promptly refrigerating or freezing items to prevent spoiling. 2. Do your own work. Prepackaged, presliced, or preportioned foods take longer for manufacturers to prepare, and those costs are passed on to consumers. Separating foods oneself and putting them into manageable portions may take a little time, but the savings for consumers could be considerable. 3. Buy in bulk when it makes sense. Bulk warehouse stores can

make it easier to stock up on essentials. But they also can entice people to buy items they really do not need. Consumers should only purchase items that make fiscal sense or ones that cannot be purchased elsewhere for less. Always compare the price per weight or per unit when shopping. 4. Stock up on staples. Be on the lookout for sales on items used frequently, particularly staples that can be stored away. Watch for low prices on coffee,

Are you changing jobs? Do you have Are you changing jobs? Are jobs? Figuring out awhat 401(k)? Are you you changing changing jobs? Doeasier you have to do is than Do Do you you have have a 401(k)? a 401(k)? you might think! a 401(k)?

oils and canned goods, stocking up when such items go on sale. 5. Embrace dried and canned beans. Beans offer filling fiber and protein for relatively little cost. They also can be added to meat or vegetable recipes to bulk up dishes. 6. Plan ahead. Planning ahead can save big bucks. Peruse sales before leaving the house and spend time visiting a few different stores to save more money. Make use of store coupon apps to preload savings that can be used at checkout. 7. Explore frugal recipes. Skipping meat or other expensive items once in awhile can help reduce food bills. Save expensive items for treats, which can make you appreciate them that much more. The same concept can be used for dining out. It is relatively easy to save money on the cost of food when consumers make a commitment to being more frugal.

CAR

Continued from page 6 ments if the car is still under a manufacturer’s warranty; and the vehicle’s title.

graph well for sale pictures.

5. Advertise the sale. Advertise the vehicle in a variety of different formats. Opt for the classifieds section of a local newspaper, post it online and share through social media. A sign on the vehicle is also smart. This will improve the chances of it being seen.

4. Prepare the vehicle. Prior to selling, give the car a facelift and a good wash. Vacuum floors, floormats, seats, and the trunk. Clean the inteSelling a car can take some rior, and wash windows inside effort, but with the right tactics, and out. A fresh wash and wax cars can be sold quickly and at can improve the appearance of prices that make sellers happy. the vehicle and help it to photo-

Figuring out what to do is easier than Figuring outthink! what you might Figuring what Figuring out to do is easierwhat than to do is easier than to domight think! than you you think! you might think!

Contact Gregory Paine, Financial Advisor with United Contact Gregory Investment Group,Paine, Financial Advisor Contact Gregory Paine, Contact Paine, to make Gregory an with United Financial Advisor Financial Advisor appointment to Investment withUnited United with discuss your Group, options to make anGroup, Investment Group, Investment by calling appointment to make an to make an to (507) 333-0419. discuss your options appointment appointment toto by calling discuss your options rvices are off through INFINEX INC. INVESTMENTS, Member FINRA/SIPC. UnitedUnited discuss your options Investments andered insurance products and servicesINVESTMENTS, are offered through INFINEX INC. Member FINRA/SIPC. (507) 333-0419. nk.Investment Infi nexcalling and the bank are not affiInfi liated. made available through by Group is a trade name of the bank. nex andProducts the bank are and not affiservices liated. Products and services made available through by Infi nex calling are not of insured the FDICStates or any other agency the United States or andobligations are not depositsof or obligations of nor guaranteed ther agency thebyUnited and areofnot deposits nor guaranteed or or insured by are any bank or bankto affiliate. These products subject to invetment risk, including (507) 333-0419. products subject invetment risk,are including the possible lossthe ofpossible value.loss of value. (507) 333-0419.

Stop by 1st United Bank today and let us help you set up your new IRA account.

www.1stunited.com 43 0 4th St. N W, F aribault 507 - 3 3 4- 2201

Cash Wise F oods, O w atonna 507 - 444- 9 9 50

February 2018

RICE COUNTY FINANCIAL GUIDE

LIFE

Female workers still earn on average $.80 to every $1 that a man earns

Continued from page 7 whole life insurance policy to purchase a home, start a business or even fund retirement. Universal Life Insurance This type of life insurance is a form of permanent life insurance that covers you throughout your lifetime and generally offers more flexibility than whole life insurance. Along the way, you can adjust things like your premium payment amounts and frequency, and your death benefit, to meet your needs and goals. Similar to whole life insurance, you can also borrow from your funds for future financial needs.

Women’s pay still lagging (Metro) Fans of the CBS hit television show ‘The Big Bang Theory’ may have learned that, in 2014, the five original cast members renegotiated their salaries to earn $1 million per episode. The original cast - largely male - includes Johnny Galecki, Jim Parsons, Simon Helberg, Kunal Nayyar, and Kaley Cuoco. Two actresses later joined the show, becoming mainstays of the comedy. However, newcomers Mayim Bialik and Melissa Rauch haven’t earned nearly as much as their costars for years. Recently, the original actors agreed to a pay cut so that Bialik and Rauch could earn more. Unfortunately, the scenario that played out with ‘The Big Bang Theory’ cast is not an anomaly. Whether in Hollywood or elsewhere, many women still earn less than their male counterparts. Although the gender pay gap has been getting steadily smaller, women still earn roughly $.80 to every

PAGE 9

$1 earned by men in both the United States and Canada, according to the Bureau of Labor Statistics and Statistics Canada, respectively. Women’s Policy Research says that, if current trends continue, females will not match males in pay until 2059. Race and age also play a role in the disparity in pay between males and females, with Asian American women earning around 90 percent of what white men do, and Hispanic or Latina women earning about 54 percent of what white men earn, according to a 2016 report from The American Association of University Women. The biggest wage gap by industry in the United States is in the financial and insurance sector. Even though women account for more than half of all employees in these industries, the BLS in 2015 reported that they earn only about $.60 for every $1 men earn. The industry closest to salary parity is construction, where the difference in pay is a few cents. Some states are closing

the gap faster than others. The AAUW policy analysts found that the states with the smallest gaps are New York, California and Florida. Oklahoma, Louisiana, Alabama, and Utah are states with substantial gaps. The news is similar in Canada. Updated figures, compiled from Statistics Canada data, show the pay gap exists in every province and in every major occupational group. Furthermore, the disparity in annual earnings between men and women has barely moved over the last 20 years, even as education levels among women have surpassed those of men. STEM-based careers remain the best avenue for women to reach near-parity in pay, as science-backed careers seem to offer the closest in comparable pay, according to the BLS. Although the gender pay gap is closing slowly, society still has a way to go before women are earning as much as their male counterparts.

of the most affordable life insurance options. Unlike whole and universal life insurance policies, there is no cash value. (NOTE: Technically, our term policy does not “expire” at the end of the term period, but the premium increases annually, and the intent is that most people will not keep the policy in force after the level period. It is designed to be kept for a shorter amount of time.) Convertible Life Insurance Some term life insurance policies have the option of being converted to a permanent life insurance policy. This gives you the benefit of initially obtaining less expensive life insurance while also being able to switch to a permanent policy as insurance needs and financial situations change. By converting to a whole or universal life insurance policy, you’ll be able to take advantage of the additional benefits, such as a policy that never expires and accumulating cash value from which you can borrow.

Term Life Insurance A term life insurance policy provides a predetermined sum (also called death benefit) if you, as the insured, die during a specified period of time. The term may be anywhere from one year to over 20 years long depending on the policy you choose. Because term insurance is designed to be kept for a shorter amount of time, term life insurance is one How Much Life Insurance Do You

Need? When it comes to deciding on your life insurance policy, one of the biggest questions to answer is how much do you need. There are a variety of factors that come into play when it comes to your life insurance needs, including age, salary, expenses, debts and future financial needs. Meet with a financial professional to assess your needs. Now that you have a firm understanding of the basics of life insurance, this can simplify the decision-making process and help you pick the right option for you and your family.

Trusted for generations... Since 1916, Auto-Owners Insurance and your local independent agent have been there when it matters most.

330 entra en e ar a t • 507-334-5577 www.heartman.com

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RICE COUNTY FINANCIAL GUIDE

February 2018

Furnishing a home with antiques can protect the planet and may even save homeowners money

The various ways going green saves consumers money Many people adopt ecofriendly practices in an effort to protect and preserve the planet. But going green can be as good for adultsâ&#x20AC;&#x2122; pocketbooks as it is for the planet. People who start making concerted efforts to go green are often surprised to learn the myriad ways they are suddenly saving money. While finances might not be the primary motivator that compels people to start living more eco-friendly lifestyles, recognizing the many ways that going green can save consumers

money might be just what people manufacturer-recommended LED lights consume just 20 to need to keep them on track in maintenance guidelines can en- 25 percent of the energy used their efforts to help the planet. sure all vehicle components are by incandescent bulbs, all the operating smoothly. That means while lasting as much as 25 times On the road the engine does not have to work longer than incandescents. That Drivers who alter their as hard as it would if a vehicle saves men and women money driving habits can save money in was poorly maintained, thereby on their energy bills. While LED various ways. Defensive driving conserving fuel. lights are more expensive to purhas long been touted as the safest chase than many of the alternaway to take to the road, but such Lighting tives, their long life expectancy an approach to driving also can Household lighting is an- means consumers can expect to be financially savvy. Drivers who other area where consumers see returns on that investment do not frequently accelerate or can protect the planet and save long before the bulbs are no lonstop suddenly can conserve fuel, money at the same time. Accord- ger functional. saving them money at the filling ing to the U.S. Department of station. In addition, following Energy, Energy StarÂ¨-qualified

Furnishings Another way to go green and save money is to forgo new furnishings for used furniture or antiques. Some antiques might prove more expensive than brand new items, but savvy shoppers can likely find older, less costly items for a fraction of the price of brand new furnishings. Buying used furniture or antiques reduces landfill waste and cuts back on manufacturing, packaging and transportation, each of which can take a toll on the planet. Consumers who need

new furnishings for their homes also can look for products made of recycled materials, which reduces landfill waste, or items made from eco-friendly materials that grow quickly, thereby reducing the need for pesticides. Going green is a commendable way to live and safeguard the planet. Adopting such a lifestyle also can be a great way to save money.

February 2018

RICE COUNTY FINANCIAL GUIDE

How millennials spend their money (Metro) Millennials include people born between 1980 and 2000. Millennials have become an influential demographic, changing the way business is conducted. While influencing technology, social norms and mores, millennials also are affecting the economy. Forbes says that many millennials have a shaky relationship with money, due in some part to the fact that they lived through one of the worst recessions the United States has experienced in decades. Couple that with staggering student loan debt and it’s easy to see why millennials may be facing an uphill battle when it comes to their finances. Millennials are falling particularly short in regard to saving money. According to a 2017 GOBankingRates survey, 57 percent of Americans have around $1,000 in savings. Sixty-seven percent of young millennials, between ages 18 and 24 have less than $1,000, says the survey. Canadians are saving even less, even though in the early 1980s Cana-

dians of most ages used to save twice as much as Americans, or 20 percent of their disposable income, according to the Bureau of Economic Analysis. Many millennials spend more than they earn and live above their means according to a report by American Express Business Insight. This, along with school debt, has compromised millennials’ ability to purchase a home or even get married. Just how are millennials spending their money? Here’s a look at the common patterns. • periences is a high priority for Gen Y. This includes concerts, sporting events, live performances, and other social events more so than possessions or career status, offers Forbes. • TD Bank found that millennials make more retail purchases and dine out more than other generations, but generally spend less money overall. • als spend about $1,000 more on healthcare expenses than the

generations that preceded them, states financial resource Mother Jones. Housing and education costs also have risen, contributing to a smaller pool of savings. • Shop.org survey indicated that millennials are twice as likely as other generations to pay extra for same-day delivery of online purchases. • ed for Pew Research found that 40 percent of millennials have at least one tattoo. • poll from the summer of 2016 found 53 percent of Americans ages 18 to 29 actively try to include organic foods in their diets. • RBC¨ Small Business poll found 70 percent of Canadian millennials are willing to pay more for goods and services if they’re sold by a small or local business. Millennials have grown up during a period of rapid change. Their large numbers are shaping the economy in myriad ways.

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Grow your retirement savings

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Agent Photo

301 Division St Northfield Agent Info (507) 645-4212 (507) 412-0658 Cell

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Auto I Home I Life I Business I College I Retirement 1 If AccumuLock Indexed Annuity is funded by a qualified plan, please note qualified plans already offer tax_deferred accumulation. Neither the company nor its agents give tax, accounting or legal advice. Please consult your professional advisors. 2 Assuming Simple7 Income Rider has been Disclosure activated by the policy owner and that the Rider has not terminated due to death of an owner, excess withdrawals, policy surrender, election of payment option, or change of owner/annuitant. Qualifications and restrictions apply for activation. Farm Bureau Property & Casualty Insurance Company,* Western Agricultural Insurance Company,* Farm Bureau Life Insurance Company*/West Des Moines, IA. *Company providers of Farm Bureau Financial Services A133 (8-17)

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RICE COUNTY FINANCIAL GUIDE

320 4th St NW, Faribault, MN 55021

February 2018

507-334-8888

15-1446

1300 Bollenbacher Dr, Northfield, MN 55057

507-645-6281