SAN LUIS PROGRESS Finance & VALLEY Insurance
2017
February 22, 2017 719-852-3531 835 First Ave. Monte Vista, Colo.
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Finance & Insurance Progress
Wednesday, February 22, 2017
First Southwest Bank receives almost $6 million through USDA
Courtesy photo
Strategies to repay student loans as quickly as possible
Millions of people fund their college educations with student loans. Such loans can make it possible for students to attend the very best universities in the world, but they also can be burdensome when students graduate and face the unenviable task of repayment. Student loan debt figures are staggering. According to Debt.org, student loan debt in the United States is roughly $1.2 trillion, while the Canadian Federation of Students reports that education-related debt in Canada is more than $19 billion, a figure that reflects the cost of college tuition rising more than 137 percent in the last quarter century. The college resource website Cappex.com estimates that the average student debt for members of the class of 2016 is $37,173, a jaw dropping 6 percent increase from the average debt held by members of the class of 2015 upon graduation. Paying down that debt can seem like a daunting task, but recent grads need not fret that they will still be paying off student loans when their own children are ready to enroll in college or university. The following are a few strategies college grads may want to consider as they look for ways to pay off their student loans as quickly as possible. • Create a monthly budget before the repayment period begins. Monthly budgets are an essential element of sound financial planning, but grads should not wait until their repayment period begins to develop their budgets. Even if the repayment grace period has just begun, grads should build at least the minimum required payment into their monthly budgets. Simply put the money into a savings account until the repayment period begins. Adjusting to repaying loans as early as possible can soften the blow once the repayment period actually begins. • Pay more than the minimum. Grads will have a relatively brief grace period to start repaying their loans after graduating. For those who are not going on to graduate or profes-
sional school, that grace period may be six months. As the due date for that first payment draws near, grads will receive a letter from their lenders indicating their overall debt and their minimum monthly payment. Paying more than that minimum monthly payment can help borrowers pay off their student loans far faster than simply paying the minimum each month. Many homeowners employ this strategy with their mortgages, and grads can do the same when repaying their student loans. • Establish short-term financial goals. Shortterm financial goals can motivate borrowers to maintain their financial discipline, especially in those initial years after college when many new graduates struggle with money management. Be specific about goals, making sure to pick a target date to repay student loans in full. Grads who want to become homeowners can work to achieve that goal before age 30. Once that goal has been set, grads can research average home costs in their desired areas. Such information can motivate grads to pay off their student loans as quickly as possible so they can be on track to achieve their larger goal of buying a home in accordance to their preestablished goal. • Live with a roommate or roommates. Recent graduates who landed their first professional job may feel living alone is the ultimate illustration of their financial independence. But living with a roommate or roommates can free up more money for borrowers to put toward repaying their student loans. Roommates share utility and cable/internet bills, and room shares are often much less expensive than studio or one-bedroom apartments. Many young professionals, especially those moving to a new city for their first job, find living with roommates after college is also a great way to develop or expand a social network. Repaying student loans takes discipline, but that discipline is rewarded when loans are repaid long before reaching their maturity date. MM16C618
ALAMOSA—First Southwest Bank’s nonprofit affiliate First Southwest Community Fund was one of 30 one entities nationwide, and one of two in Colorado, to receive an award from the USDA’s Rural Development Intermediary Relending Program in October of last year. Through a competitive application process, First Southwest Community Fund was awarded $750,000, which will be invested back into the community as low-rate, fixed loans to spur economic development in Southern Colorado. “This money will be offered exclusively to small businesses that create or retain jobs in rural Colorado,” First Southwest Bank CEO Kent Curtis said. “Recognizing the economic impact of these businesses, we will use this money to create a revolving loan fund that supports new and expanding small businesses.” Additionally, First Southwest Bank is proud to receive $5,000,000 through the USDA Rural Development Community Facilities Program. First Southwest Bank was one of 26 entities nationwide, and the only one in Colorado, to receive an award this year. This money will be used to facilitate funding for critical community facilities, such as libraries, fire stations and police stations, which often face unique roadblocks to securing funding. “Previously this program was only available to nonprofits,” Curtis added. “Recognizing the role Community Development
Financial Institutions (CDFI) play, the USDA decided to expand this program. We are thrilled to participate in the inaugural expansion and facilitate funding of essential projects in rural communities.” First Southwest Bank is certified as a CDFI through the U.S. Treasury. This certification recognizes our commitment to important local initiatives such as creating new jobs in rural communities, assisting workers in obtaining higher wage jobs and enhancing financial empowerment for members of underserved communities. “USDA Rural Development is the only federal agency that focuses solely on the wellbeing of rural communities and we’re fortunate to work with innovative partners like First Southwest Bank and their community fund to help in this effort. The investments they make will help build communities, create jobs and bolster economic development throughout SW Colorado,” said Trudy Kareus, USDA Rural Development Colorado State Director. Information on First Southwest Bank and its CDFI designation are at www.fswb.com. Information about First Southwest Community Fund can be found at www.firstsouthwestcommunity.org. More information about the USDA Community Facilities program can be found at www.rd.usda.gov/programsservices/all-programs/community-facilitiesprograms, information about the Intermediary Relending Program
Information for young parents to include in their wills A will is a legal document that contains instructions as to what should be done with a person’s money and property upon that person’s death. While no young parent wants to think of their own mortality, parents must have wills to ensure their families are taken care of how they see fit in the wake of their deaths. When devising a will, young parents should consult a legal professional to ensure they have covered all the bases. But the following is some of the basic information young parents should include in their wills. • Guardianship: Young parents should include instructions regarding guardianship of their children should they pass away while the children are under the age of 18. Parents should not assume that their wishes regarding guardianship, even if those wishes had been expressed often, will be followed should they pass away without a will. If no will has been written, laws may dictate that children go to a spouse or the deceased’s closest relative. Even if parents’ wishes regarding guardianship align with the law, they should still spell those wishes out in writing in their wills. • Assets: Young parents should use their wills to assign their assets so their money and property is distributed to their heirs in accordance with their wishes. Parents should be as specific as possible when dictating their wishes regarding their assets. Doing so will prevent disputes and ensure their as-
sets are assigned exactly how they intended them to be. For example, parents who have invested in real estate and own more than one home should list the address of each property when assigning the homes to their heirs. • Executor: This person ensures the deceased’s wishes are met and works with the deceased’s attorney to ensure assets are allocated in adherence to the will. Before naming an executor, parents should first speak with the person to determine if they are willing to do so. The responsibility of serving as an executor is an enormous one, and parents’ initial choice may already be serving as executor of another estate and not want the additional responsibility. When choosing an executor, parents should choose a trustworthy person who has agreed to serve as an executor and understands all of the responsibility that comes with that task. • Trustee: Young parents who desire to establish a trust for their children in the wake of their death also must name a trustee to oversee the assets left to their children if their children are too young to do so themselves. The responsibilities of a trustee are similar to those of an executor, but overseeing a trust can last considerably longer than executing a will. For example, trustees may be asked to manage investments and periodically disburse funds for children of the deceased, and such responsibilities can last decades. MM16C620
Wednesday, February 22, 2017
Finance & Insurance Progress
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Pot industry nets $200 million in tax revenue
COLORADO — Colorado’s marijuana industry soared to new highs in 2016. According to data released recently by the Colorado Department of Revenue, dispensaries in the state sold $1.3 billion in medical and recreational marijuana last year , generating close to $200 million in tax revenue for the state.
“Colorado has had a really good run, being the first mover,” Miles Light, an economist with the Marijuana Policy Group, told The Denver Post’s Cannabist blog. “Now, as other states legalize, some of these external benefits that are occurring are going to be eroded.” Another factor that could weigh on the industry — or perhaps even eliminate it entirely — is President Donald Trump’s newly confirmed attorney general, Jeff Sessions, who previously called legalization of the drug “a mistake,” and said that “we need grown-ups in Washington to say marijuana is not the kind of thing that ought to be legalized.”
Being charitable when money is tight
The term “charitable giving” is often associated with financial donations. But charity is not exclusive to donating dollars, and those who want to give back but can’t fit donations into their budgets can explore various ways to make an impact without writing a check. Volunteering According to the United States Bureau of Labor Statistics, roughly 63 million people volunteered through or for an organization at least once between September 2014 and September 2015. Up north, the General Social Survey on Giving, Volunteering and Participating from Statistics Canada found that more than four in 10 Canadians ages 15 and older volunteered to some degree in 2013. Volunteering is a popular and rewarding way to give back to one’s community. Nonprofits and charitable organizations may fall short of meeting their missions if not for the valuable services provided by volunteers, so pitching in can be just as valuable as writing a check. Discuss your personal and professional experience with an organization to find a volunteering opportunity that suits you and your skill set. In addition to charitable organizations, schools, hospitals, libraries, and religious institutions may have volunteering opportunities for those who want to give back. Item donations Donating time and money may be among the most popular ways to give back, but those are not the only ways to donate to organizations and people in need. Go through your closet and donate clothes you no longer wear. Instead of selling furniture you plan to replace, contact local charitable organizations to see if they would like your furniture, or donate pieces that they can then sell to finance their operations. Some donated items, such as vehicles, may earn donors tax deductions. Medical donations Donating money or dropping off canned goods at food banks may be the first things many people think of when mulling charitable donations, but medical donations also present a great way to give back. The American Red Cross notes that blood donations help millions of people and a single blood donation can end up helping more than one person. The Red Cross also notes that roughly 36,000 units of red blood cells are needed in the United States alone each day, while nearly 7,000 units of platelets and 10,000 units of plasma are needed daily. Donating blood, plasma or platelets can help save lives, and making such donations does not require substantial commitments of time. Organ donations also present a great way to give back. The U.S. Department of Health and Human Services notes that an average of 22 people die each day waiting for transplants that
cannot take place because of the shortage of organ donors. Many of those deaths may not happen if more people signed up to be organ donors, an act that may be as simple as checking a box on the back of your driver’s license. Charitable men and women without much room in their budgets to make donations can still make a difference by giving back in other ways.
“The big lesson we tell other states is you probably shouldn’t legalize marijuana if you want to make money — that’s not why you do it,” says J. Skyler McKinley, deputy director of Colorado Gov. John Hickenlooper’s (D) office of marijuana coordination. “You do it because you think that a regulated marketplace might be safer than an unregulated marketplace or you believe that the war on drugs didn’t work.” For perspective, that’s slightly more than the entire 2015 GDP for the islands of Antigua and Barbuda. Cities in Colorado also collected millions of additional tax dollars, as each city typically tacks on extra duties in addition to state taxes. Colorado dispensaries sold slightly over $699 million in medical and recreational marijuana in 2014, the first year sales were legal in the state. That figure leaped to $996 million in 2015. Impressive as Colorado’s $1.3 billion market might seem, it’s tiny compared to the $53.3 billion that consumers in North America are believed to have spent on the drug in 2016, according to Arcview Market Research. What’s more, the company estimates 87 percent of those sales occurred in the illegal market. “[Colorado] is also reaping the invaluable public health and safety benefits of replacing an underground market with a tightly regulated system.” Mason Tvert, the Marijuana Policy Project “[Colorado’s tax revenue] is just the tip of the iceberg,” Tvert of the Denver-based Marijuana Policy Project told The Huffington Post in an emailed statement. “The state is also reaping the invaluable public health and safety benefits of replacing an underground market with a tightly regulated system.” “Marijuana is now being sold in licensed
businesses, rather than out on the street,” Tvert continued. “It is being properly tested, packaged, and labeled, and it is only being sold to adults who show proof of age. The system is working.” The extra $200 million earmarked for education in tax revenue is nice, but compared to the state’s budgetary needs and Colorado’s perpetually anemic education funding, it’s hardly a windfall. Of that money, $40 million has been set aside for grants to be awarded for public school construction, with the remainder going toward health care, health education, law enforcement and substance abuse prevention and treatment programs. “Marijuana tax revenue is not going to cover the state’s budget, but it is going to cover important programs and services that would otherwise be left out of it,” Tvert said. Experts caution that Colorado’s sales may plateau in 2017 and beyond, as other states begin to legalize marijuana and market pressures exert a downward force on the wholesale price of cannabis. “Colorado has had a really good run, being the first mover,” Miles Light, an economist with the Marijuana Policy Group, told The Denver Post’s Cannabist blog . “Now, as other states legalize, some of these external benefits that are occurring are going to be eroded.” “The big lesson we tell other states is you probably shouldn’t legalize marijuana if you want to make money — that’s not why you do it,” J. Skyler McKinley, deputy director of Colorado Gov. John Hickenlooper’s (D) office of marijuana coordination, told HuffPost in 2015. “You do it because you think that a regulated marketplace might be safer than an unregulated marketplace or you believe that the war on drugs didn’t work.”
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Finance & Insurance Progress
Wednesday, February 22, 2017
Farm Credit of Southern Colorado announces new leadership
COLORADO SPRINGS— Last summer Russell Tomky announced his retirement from Farm Credit of Southern Colorado after 35 years of service. During his time as President and CEO, Tomky has helped the association achieve many milestones. Under his leadership, most remarkably, Tomky led the growth of the organization to reach the mark of one billion dollars in assets. He also strengthened internal controls to protect the Association from the current regulatory environment and finally, he is responsible for taking the lead to significantly reverse deferred maintenance on buildings, positioning the association to face the next 30 years. The board of directors is excited to announce that they have hired Alan Woodard to fill the role of president and CEO. Woodard comes to Farm Credit of Southern Colorado from CoBank where he most recently served as regional vice president over Kansas, Oklahoma, Wyoming and Colorado. Woodard has 25 years of agricultural and commercial banking experience, primarily with the Farm Credit system. In addition to his financially related services experience, he operated a small, third generation family farm and served the ag industry in leadership roles on a variety of cooperative boards. Courtesy Photos Woodard took the reins of Farm Credit of Alan Woodard became the new CEO/president on Oct. 1. Southern Colorado on Oct. 1.
Russell Tomky retired from Farm Credit of Southern Colorado after 35 years of service.
Use insurance checklist to review policies, coverage
Darrel Meis
Courtesy Photo
SLV Federal Bank hires new loan officer SAN LUIS VALLEY— Darrell Meis has been hired by San Luis Valley Federal Bank as a Loan officer to assist bank members with all their mortgage and personal loan needs. He is splitting his time between the main office in Alamosa and the bank’s Monte Vista branch. Prior to starting with the bank, Darrell worked for Adams State University. He managed the ASU Bookstore from 1986 to 2016. Prior to his time at ASU, Darrell worked at SLV Federal for three years as a loan officer and worked two years for the Alamosa Industrial Bank. He grew up Denver attending Pomona High School. He attended Adams State and graduated in 1981 with a BS degree in Business Marketing Management. He played football for ASU all four years of his attendance as was a captain of the 1981 team that was recently inducted into the ASU Athletic Hall of Fame. He resides in Alamosa with his wife Kim (Buron), who is a teacher for
the North Conejos School District. She was also inducted into the ASU Athletics Hall of Fame and as a national champion and AllAmerican gymnast. They have four children and 12 grandchildren. He’s been involved a number of community organizations and currently serves as an assistant football coach for seventh and eighth grade Ortega Middle School football. He also serves as the lead pyro-technician for the Alamosa Fireworks team that performs the Alamosa July 4 fireworks show. Darrell will be able to counsel the bank’s members with all their home and personal loan needs. Bank President Duane Bussey said, “We are so excited to have Darrell back at the bank after his outstanding career at Adams State. Darrell is a person of the highest integrity and he loves people. Our members will enjoy his enthusiasm and will appreciate his work ethic. He’s jumped right back into the business and will be a great addition to our banking team.”
COLORADO—The start of a new year is a great time to reevaluate insurance policies. Changing circumstances may lead to different insurance needs. Did you have a baby? Get married? Purchase a new home or car? If so, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), recommends that you check whether you have the right fit in policy protection. Take some time to talk with your agent and review policies and see if they meet your current needs. Your agent or insurance company can help determine whether your current policies provide adequate coverage or if you might need more or less. Even if you haven’t experienced a life-changing event, you could be eligible for discounts or new insurance products may better serve your needs. And if you need help with some of the lingo, want to verify what your insurance company tells you or just want to have a better understanding of the world or insurance, contact the DOI with your questions—1-800-930-3745, DORA_Insurance@state.co.us. Life insurance Changes—such as a birth, divorce, remarriage or even a new mortgage or new job— are indicators that you might need to make changes to your life insurance policy, at the very least, that you should review your policy. Read your policy carefully and answer these questions. Do premiums or benefits vary from year to year? How much do the benefits build up in the policy? What part of the premiums or benefits is not guaranteed? What is the effect of interest on money paid and received at different times on the policy? In what situations and through what procedures can you access cash values? Can the policy be converted into another form of insurance or annuity? In the case of the birth of a child or a new marriage, you might want to consider increasing your death benefit. Check with your agent to see if your insurance company requires a physical exam before increasing your coverage levels.
Alternatively, events like paying off a mortgage, retirement or children finishing college might mean that you can lower your life insurance coverage and premiums. Your life insurance company might be able to offer “conversion privileges” from your current term life insurance policy to a new whole life insurance policy. You might also be able to expand your death benefits so they can be used while you are still living. Ask your insurance agent or company about these options. Homeowners/rental insurance This is a great time to update your home inventory and make sure your homeowners or rental policy is up-to-date. Take some photos or video of your prized possessions. Remember to note any antique items and their value so you can talk with your insurance agent or insurance company to ensure that they are properly covered. If you need to create a home inventory, the National Association of Insurance Commissioners (NAIC) offers a free smartphone app, myHOME Scr. APP.book, takes some of the headache out of the process. There is one for iPhones and another for Android. You can also download a paper version that works as a good start to a complete inventory. Remember to add any new gifts to your home inventory, too. Include as many details as you can and take a photo of each item. Most basic home insurance policies have standard limits for big-ticket items like electronics, art, jewelry or sporting equipment. You may need special coverage, so call your agent to discuss changes for your policy. Also consider your environment. Your home could be located in an area prone to flooding or earthquakes. These disasters can be costly, and may not be covered under a standard policy. Speak to your agent about possibly adding coverage for these perils.
Auto insurance Have you had any changes to your driving habits? If so, tell your agent to ensure your auto policy will cover you in case of an accident. Also take some time to check your auto insurance policy by following the guidelines Please see INSURANCE on Page 5
Wednesday, February 22, 2017
Finance & Insurance Progress
Page 5
Creede remains thankful to Del Norte Bank BY LYNDSIE FERRELL
SAN LUIS VALLEY— Several Valley communities were affected last spring when branches of the Community Banks of Colorado closed throughout the region. In February of 2016, the massive Colorado banking company announced that it would be closing banks in Creede, Del Norte, Center and other banking locations throughout the San Luis Valley. Communities like Creede, segregated from the rest of the Valley, felt betrayed after many years of loyal service to the bank. In an article printed by the Mineral County Miner on Feb. 9, 2016, it explained the position of the bank and the reason behind their decision to close the locations. In the announcement, banking representatives confirmed the closures that would be taking place beginning April 29, 2016. Community Banks Regional President Tricia Maxon confirmed the closure. “We have a lot of banks in Southern Colorado and an industry that is changing before our eyes,” said Maxon. The regional office decided to close the bank in Creede because there were other banking locations in Lake City and South Fork. The Creede location was chosen to close because the closest location was only 25 miles away compared to the Lake City location where the next closest location would have been in Gunnison, which is more than 60 miles away. Now, thanks to a long-standing, local bank Creede is able to continue banking in town, rather than having to rely on traveling to the remaining Community Bank locations. Del Norte Bank representative Mike Hurst met with Mineral County Commissioners on Feb. 24, 2016, to discuss future plans to bring a branch to the area. The bank was well on its way to opening when they hit a roadblock with the Colorado State Historical Preservation Office (SHPO) during construction of the proposed building. SHPO announced that two conditions exist with the project that forces an “Adverse Action” finding, triggering a sometimes lengthy mitigation process with several federal agencies including
Photo by Lyndsie Ferrell
The Creede community remains grateful for the work and dedication shown to them in a time of need by the Del Norte Bank. the FDIC, Tribal Historic Preservation Office and Hurst requested a new, temporary location ficials, such as the city and county, switched (THPO) and the Advisory Council for Historic permit from the Federal Deposit Insurance their accounts to the new bank and secured Preservation. Corporation. The temporary location request the success of the bank in the area. Residents On May 24, 2016, it became apparent that the was quickly approved by the FDIC. continue to be grateful for the hard work and “Adverse Action” finding by the State Historic It wasn’t until August that the branch in dedication of local officials as well as Del Norte Preservation Officer was going to significantly Creede was finally able to open its doors and Bank representatives who made the bank posdelay the opening of the permanent branch begin serving the community. Even local of- sible in Creede.
Benefits of joining a INSURANCE credit union abound Customers have more options than ever before when it comes to personal banking. Your neighborhood is no doubt home to many financial institutions, and it’s up to you to find the one that best suits your individual needs. Credit unions are one financial institution option to consider. Credit unions benefit their members in various ways while offering many of the same services and amenities offered by traditional banks. Known around the world by various names, credit unions are member-owned, not-for-profit financial cooperatives that offer financial services to their members. Credit unions are typically organized around a common bond, such as members who belong to a certain community, employer, organization, or club. According to the World Council of Credit Unions, credit unions pool their members’ savings deposits and shares to finance their own loan portfolios rather than rely on outside capital. Any income made is applied to lower interest rates on loans, higher interest rates on savings accounts or new product and service development. Since credit unions are under no pressure to make money off of their customers, which traditional banks may be, they can expend more energy developing their offerings and providing a greater level of customer service. Also, since the members of a credit union have a say in the organization’s decisions, usually changes and decisions made are designed to benefit everyone involved. Credit unions aim to offer financial services at the lowest costs possible and may charge fewer fees as a result. In addition, accounts may be free with no minimum balance requirements. One of the things that most attracts people to credit unions is that interest rates often
significantly exceed those offered by banks. Members can earn more money on their savings. Plus, since interest charged for loans on credit accounts are generally lower than most banks’, the savings is two-fold. Many credit unions will set a limit to how much interest they will charge on credit cards and loans. While the benefits certainly make credit unions attractive, it is important to point out some potential disadvantages. Because of their nonprofit status, some credit unions may not have adequate funds to invest heavily in technology. Mobile banking and websites may be lacking. Also, it can be difficult to find ATMs affiliated with your credit union outside of your community that do not charge additional fees. What’s more, because credit unions are linked to a certain affiliation, your membership may be restricted. But there is a way around this, as newer credit unions are opening every day to service a wider assortment of members. Credit unions are a great option for those looking to spend less on banking services while potentially earning greater interest on their savings. MM15C748
below. Make sure your coverage is appropriate for your life situation. Liability is the part of the policy that pays for any injury or damage if you cause an accident. If your liability insurance is too low, it is possible that you could be sued for any damages above your liability limits. Review your deductibles for comprehensive and collision coverage. This is the amount you will pay if your car is damaged or totaled without fault of another driver. Raising or lowering this amount can affect your premium. Before hitting the road, make sure you have a copy of your insurance card and your insurance agent or company’s number in your vehicle. It is a good idea to accurately record details of an accident if you are in one. The NAIC smartphone application WreckCheck walks you through the process of gathering information following an accident. You can then email your notes directly to your agent. Download the free app from iTunes or Google Play.
Health insurance You may have recently enrolled or changed your health insurance whether through your employer, Medicare or your state exchange. Make sure you have new insurance cards. Before you visit a doctor, verify that your paperwork is in order. Check your provider lists to make sure visits to your doctor and any specialists are still covered by your policy, as in-network or preferred provider lists change from year to year. Read through your documents and make note of copays for in-network and out-of-network providers so you are not surprised later. If you’re planning a vacation away from home, check with your insurance carrier to identify urgent care centers and hospitals that accept your insurance coverage near your
Continued from Page 4 destination and along the way. Ask your carrier about applicable co-pays and deductibles if care is needed. Review this glossary for an explanation of some of the terms you may find on your health insurance paperwork.
Protect yourself Insurance fraud can happen to anyone, anywhere. Protect yourself in 2017 and beyond by following the tips below. Don’t give out any personal information—like your social security number or bank information—over the phone until you have verified the legitimacy of the insurance company and agent with your state insurance department. Ask for copies of everything you sign and keep a copy of the payment receipt or check for the initial premium payment you gave the agent for the policy. Call the insurance company if you don’t receive a copy of the insurance policy outlining your coverage and its limitations within 30 days of your purchase. The best way to protect yourself from insurance fraud is to research the agent and insurance company you’re considering. Before writing your check or signing the contract, visit the DOI’s verification page to make sure they are licensed here in Colorado. Also check to see if they show up on the regulatory/ disciplinary actions page.
More information Find more information about your insurance needs and tips for choosing the coverage that is best for you and your family at www. insureUonline.org. If you have additional questions about insurance, contact the Colorado Division of Insurance – 1-800-930-3745, DORA_Insurance@state.co.us or visit AskDORA.colorado.gov.
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Finance & Insurance Progress
Wednesday, February 22, 2017
Adams State provides free tax filing services
ALAMOSA— For the eighth year, the Adams State University School of Business is partnering with the Denver-based Piton Foundation to help hardworking families become more financially secure by providing free tax preparation assistance through the Tax Help Colorado program. Beginning Jan. 28, IRS-certified Adams State students prepare and e-file tax returns free of charge for individuals with household incomes of less than about $54,000 a year. Tax preparers are trained to ensure the individuals they serve get the best refund possible, as many of them are eligible for the Earned Income Tax Credit (EITC) and Child Tax Credit. The program also helps Adams State students develop financial acumen, increased empathy for their community and greater interest in civic engagement. “Adams State’s partnership with the Piton Foundation benefits community members and provides valuable experience for our IRS-certified accounting students,” said President Beverlee J. McClure. “We are proud to provide this service and help people receive the best refund possible.” This free service is quick and confidential. From Jan. 28 through March 13, Adams State’s free tax site is open from 9 a.m. until 3 p.m. every Saturday and from 4 p.m. until 7 p.m. every Monday, in the Business School lobby, Third St. and Richardson Ave. This site will also be open from 4 p.m. until 7 p.m. on Mondays from March 27 through April 10. Tax Help Colorado operates 22 free tax sites statewide. More than 30 percent of Colorado families are eligible to participate in the program. During the 2016 tax season, Tax Help Colorado provided free tax assistance to over 9,300 individuals , helping them claim nearly $18 million in tax refunds , including nearly $6.8 million from the EITC. In addition, the program saved families more than $2.5 million in commercial tax preparation fees. People who are getting their taxes prepared at Adams State should bring the following documents: • Social Security Cards (or ITINs) for all family members, photo I.D. for taxpayer required. • All W-2, 1099s and other income-related documents, a copy of last year’s tax return, if available. • Proof of mortgage interest, property taxes, charitable donations and tax-deductible expenses. • For the Child & Dependent Care Credit,
total paid to daycare provider and the provider’s tax ID. • For college expenses: In addition to Form 1098T from your college, bring records of expenses paid for tuition, books, fees and supplies. • If eligible for Colo. Rent-Heat Rebate: 2016 rent receipts and heating bills. • Bank account number and routing number to direct deposit your refund. Get your refund faster with direct deposit. • Your health coverage form. If you or your family had coverage through: -Connect for Health Colorado: You will need a Form 1095-A , which you should receive by mid-February . If not, log in to connectforhealthco.com or call Connect for Health Colorado, 1-855-PLANS-4 YOU. - Health First Colorado: You may need a Form 1095-B , which you should receive by Jan. 31. If not, log in to Colorado.gov/ PEAK contact Health First Colorado at 1-800-221-3943. - Your Employer: You will need a Form 1095-C or Form 1095-B. Contact your employer benefits department if you haven’t received it. Didn’t have health coverage in 2016? You may have to pay a fine. Before paying the fine, check to see if you qualify for an exemption by visiting www.healthcare.gov. A list of all the Tax Help Colorado sites, as well as the locations of other free tax assistance sites in Colorado, is available by dialing 2-1-1 (it’s a free call), visiting http://www. piton.org/tax-help , or finding Tax Help Colorado on Facebook (www. facebook. com/taxhelpcolorado) and Twitter (@ TaxHelpCo). The Piton Foundation at Gary Community Investments The Piton Foundation, which is part of Gary Community Investments, is a private foundation established in 1976 by Denver oilman Sam Gary. It is committed to improving the lives of Colorado’s low income children and their families by increasing access to quality early childhood and youth development opportunities and fostering healthy family and community environments. In addition to investing in creative solutions for Colorado’s low income children and their families, Piton operates its own programs, including the Data Initiative, Tax Help Colorado, and the nation’s largest and longest-running Earned Income Tax Credit public information campaign.
Did you know? When shopping for auto loans, prospective car buyers should limit their loan shopping to a two-week period. Many auto buyers now shop for auto loans separately from shopping for cars, first arranging financing via a bank, credit union or other lender, and then beginning their search for their next car or truck. While that can help buyers secure low interest rates and borrower-friendly loan terms, buyers should know that each time they apply for loans their credit scores dip. The lower a prospective borrower’s credit score, the harder it becomes for that person to secure the best loan rate. However, according to the online
financial resource Bankrate.com, applicants who can file all of their loan applications within a two-week period will only have those applications count as one credit inquiry. That means applicants’ credit scores will only fall once as opposed to several times for prospective buyers who apply for loans sporadically over the course of several weeks or months. Potential borrowers also should know that once they have prequalified for loans and found a car or truck they want to buy, they can then present their loans terms to the dealership and ask if the dealer can beat the terms, potentially saving them more money over the life of the loan. MM16C669
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How to get and keep your finances in order In 2015, analysts with the Government Accountability Office found that the average American between the ages of 55 and 64 had accrued roughly $104,000 in retirement savings, a shockingly low figure that would make it very difficult for men and women nearing retirement to maintain their quality of life into their golden years. Things don’t look much better north of the border, where the 2015 Global Investor Pulse Survey from the asset management firm BlackRock found that the average Canadian in the same age group had amassed an average of just $125,000. While many people fear retiring with small nest eggs, that fear has apparently not been enough to inspire men and women to commit to saving more money for their golden years. But retirement saving is essential, especially since life expectancies are rising. According to the United Nations Department of Economic and Social Affairs, global life expectancies at birth are expected to rise to 76 years by the mid-21st century. That’s a far cry from the mid-20th century, when global life expectancy from birth was roughly 48 years. Longer life expectancies mean men and women will have to find ways to make their money last throughout their retirement. The earlier adults figure out how to keep their finances in order, the more money they will have when the time comes to retire. The following are a handful of strategies men and women can employ to rein in their finances in the hopes of saving more for retirement. • Review your finances at least once per month. Hectic schedules or fear of the financial unknown make it easy for adults to ignore their finances for long stretches of time. But adults should review their financial situation at least once per month, examining how they are spending their money and if there are any ways to cut costs and redirect dollars going out into their retirement accounts. Redirecting
as little as $100 per month into a retirement account can add up to a substantial amount of money over time. • Pay monthly bills immediately. Many adults receive monthly bills for utilities, rent/mortgage, phone, and television/ Internet. If you have the money in your account, pay these bills the moment you receive them. Doing so is a great way to avoid overspending on other items, such as dining out or shopping trips, and then finding yourself scrambling to pay bills come their due dates. Once all the monthly bills have been paid and you have deposited money into your savings/ retirement accounts, then you can spend any leftover money on nights out on the town or new clothes if you feel the need. • Buy only what you can afford. It sounds simple, but many adults would have far more in their retirement accounts if they simply avoided buying items they cannot afford. According to a 2015 Harris Poll conducted on behalf of NerdWallet, the average credit card debt per indebted American household in 2015 was $15,762.07. Adults who want to get their finances in order and start saving more for retirement should put the plastic away and only make purchases with cash or debit cards that take money directly out of their bank accounts once the card is swiped. • Downsize. Downsizing is another way to free up more money for retirement savings. Empty nesters can save money by downsizing to a smaller home or even an apartment. Drivers who no longer need room for the whole family can downsize from SUVs or minivans to smaller, more fuel-efficient vehicles. Adults also may be able to downsize their entertainment, switching from costly cable packages to basic plans or cutting the cord entirely and subscribing to more affordable streaming services. Getting a grip on spending can help adults save more for retirement and ensure their golden years are not compromised by lack of funds. EL166143
Wednesday, February 22, 2017
Finance & Insurance Progress
Page 7
Far-reaching effects of rising interest rates BY TERESA L. BENNS
SAN LUIS VALLEY— Imagine trying to buy a home in the 1980s — in 1981, interest rates rose to a whopping 20 percent (federal funds rate) and brought the economy to a standstill. The result was a recession, a price paid to end rising inflation. Interest rates may currently be on the rise, but they are far from the 1980s range. But mortgages are more difficult to obtain, especially for first-time homebuyers with so-so credit. And after historic lows to help bring the country out of the 2008 recession, the only way for rates to go is up, now that the economy is improving. A December article in the New York Times says as President Donald Trump unveils his stimulus package for the economy, rates will continue to rise. Current interest rates on a fixed rate, 30-year mortgage, which most homebuyers prefer, are four percent but fluctuate slightly back and forth. Should the rate rise by just one percent, it would add an additional $138 a month on payment expense to a $237,000 loan. As mortgage rates go up, home sales tend to slow as affordability declines. And those wanting to refinance are likely to wait for a better deal because their payments will not be lowered significantly. Renters also will see rents rise, as landlords purchasing units for sale or refinancing loans pass on their costs to tenants. If wages rise sufficiently however, this could offset rising rent costs. Some believe bankers will be more eager to loan money with higher interest rates because they will receive a higher return on their loans. This may not help those who have difficulty borrowing because of low credit scores, but it will free up more funds for those who already have good credit and are willing to shop around. Home sellers often see a flurry of sales at the beginning of an interest rate increases, a boon to the housing market. Additional interest rate hikes could also cause a spike in credit card interest. New student loans also will be affected, because federal loans are tied to U.S. Treasury rates. The federal government is already predicting student loan payments will go higher. Farmers and ranchers will not fare as well with rising interests rates, which tend to adversely affect land values. It also increases production costs, which are then passed on to
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consumers in the form of higher grocery bills. Small businesses will find start-up costs more expensive with banks charging higher interest rates, but this could be countered by offering small businesses lower tax rates to encourage growth, something President Trump may suggest. Car loan interest also will rise, possibly impacting car sales somewhat. And investors in the stock market are warned in a 2015 Forbes magazine article to generally adjust their expectations downward in a climate where interest rates are rising. But those depositing money regularly in a savings account will benefit from the rise in interest rates as their money will earn more interest. Individuals with CDs and other in-
Financial tips to survive job loss The job market is fickle, and no one is immune to layoffs. Although the unemployment rate in the United States dipped to 4.9 percent in June 2016 and Canada’s rate hovered around 7 percent in May 2016, the job market remains somewhat unpredictable. Preparing financially for unemployment can be prudent, even for working professionals who do not anticipate being laid off. Financial advisors recommend adults save the equivalent of six months’ salary to cover their expenses in the event of job loss. Individuals who want to protect themselves and their assets in the case of job loss can also heed the following tips. • Examine current finances. It’s important to have an accurate assessment of your current financial situation. Calculate monthly expenses to get a handle on what you are spending. Compare those expenditures against your savings to see if the latter can keep you afloat should you lose your job. Look for areas where you may be overspending, even cutting out some luxuries if you suspect a job loss is looming or just want to build your savings. • Begin budgeting for loss of health insurance. Health insurance coverage typically ends when a person is laid off. Loss of coverage might not be immediate, but it may occur within months of a layoff. Health insurance is a considerable cost, and you will need to budget for the expense so that you will have access to the health services you need. • Research options in government benefits. Few people like the prospect of visiting the
unemployment office after being laid off, but delaying the process could negatively affect your finances. It can take some time for unemployment claims to be processed, so apply as soon as possible after losing your job. • Find ways to supplement your income. Bringing in any money can be helpful. If it is feasible, look for ways to make some cash while you search for a new job in your field. This may include working from home, freelancing or selling items online. Consider part-time work while you look for a job. You may prefer to find temporary or part-time work in your fi eld, but your hobbies and other interests may present income possibilities as well. • Practice living with less. Cut out unnecessary expenses and attempt to live with less. You may find that this comes easily and continue to do so even though you remain employed. Such a trial run can bolster your savings in the event of layoff while also acclimating you to living with less should a layoff ever occur. • Don’t burn bridges. While it’s understandable to harbor some resentment toward an employer for letting you go, that same employer may be able to help you in the long run. Supervisors can help you find a new job or write glowing recommendations. Staying positive and resisting the temptation to badmouth a former employer can only help you in the long run. Losing a job is seldom easy and is often unexpected. But there are steps adults can take to prepare for losing their jobs. MM16C610
vestments also will realize a profit. Businesses can invest cash from higheryielding savings accounts on new equipment and plant improvements. Some are concerned the Federal Reserve has artificially kept interest rates too low for too
long and if rates rise too quickly, it could create a “housing bubble.� But the caution needed to avoid this situation is good news for consumers in itself, since it may mean that a rise to more traditional rates — between three to six percent — will be a few years down the road.
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Valley Publishing will once again be publishing its glossy visitors guide magazine for the San Luis Valley in May of 2017. As always, the magazine will include full-color photos and artwork, as well as a map of the SLV, calendar of events and features detailing the attractions of our beautiful Valley.
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Finance & Insurance Progress
Wednesday, February 22, 2017
Sunflower Bank Giving back… supports education through ABC program MONTE VISTA— Since 2001, Sunflower Bank has been raising money for local schools and students annually through its signature ABC program. Total donations since the program began are over $1,000,000. The program runs Jan. 3 through March 31 and supports over 300 schools across Colorado, Kansas, and Missouri. “Our mission at Sunflower Bank is to create possibility in our communities,” said Mollie Carter, President and CEO of Sunflower Bank. “We believe that by supporting and contributing to our local schools and students, we are helping provide unique programs and educational opportunities. The ABC program reflects the essence of our culture and our commitment to those we serve.” During the campaign, money will be raised for the benefit of education through the following: • $50 to a registered school for every Spend & Sign & Save checking and savings account package that is opened. Up to $50 will also be given to the new account owner if they meet specific criteria; • 5¢ for each debit card swipe when ‘credit’ is selected and the
card is registered to a participating school; • $10 for every ‘A’ on a student’s report card if their card is one of five cards drawn at every local branch, plus a matching donation for their participating school. The drawing is open to all students in grades K-12, $100 maximum per report card. Visit a local Sunflower Bank branch or SunflowerBank.com/ ABC to learn more about the ABC program and to register a Sunflower Bank debit card to a specific participating school in support of education. About Sunflower Bank Sunflower Bank is a $1.7 billion community bank, offering a complete line of personal checking, saving, mortgage and loans options, as well as business deposit, loan, and treasury management services and trust and wealth management services. Sunflower Bank is based in Salina, Kansas, with other locations throughout Kansas, Colorado, and Missouri. For more information, please visit www.SunflowerBank.com. Member FDIC. Equal Housing Lender.
Average workers’ compensation loss cost, reduction of 2.4 percent COLORADO— The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), approved a change of -2.4 percent for the average “loss costs” component of workers’ compensation premiums for 2017. Although the statewide average loss costs will decrease 2.4 percent, individual employers may see an increase or decrease to their workers’ compensation premium based on their particular classification code or industry group. This will be the third consecutive year without an increase for the loss cost component, and the second straight year with a reduction. However, the loss cost component of workers’ compensation premiums in Colorado has been going down since 2014, when the increase was only 3 percent versus the 5.2 percent increase in 2013. As has been the case in recent years, this decrease is due to an overall reduction in the number of workplace accidents. “Employers in Colorado continue to do a good job of preventing workplace incidents in the first place, which helps everyone in keeping workers’ compensation costs down,” said Commissioner of Insurance Marguerite Salazar. “I’m pleased to see this trend continue.” Loss costs are the average cost of lost wages and medical payments of workers injured during the course of their employment. Factors that may increase workers’ compensation
costs include: frequency, duration of claim, number of treatments for each claim, severity of injury, increasing medical costs and overall costs to cover workers’ compensation claims. The National Council on Compensation Insurance (NCCI), a rating and advisory organization, collects annual data on workers compensation claims for the insurance industry, and publishes loss costs that form the basis for all workers compensation premium determinations. All insurers in Colorado use the NCCI loss costs as a base. Each insurer’s own expenses are added to the NCCI’s loss costs to arrive at the rates charged to employers. This is why each employer’s specific rate change may differ from the -2.4 percent change. The projected loss cost figures for 2017 were submitted by NCCI to the DOI earlier this year. Independent actuarial consultants were contracted to assist the Division in reviewing the analysis for all of the industry classes in Colorado. The NCCI filing, the actuarial analysis and any public comments are used by the Commissioner of Insurance to establish the loss costs used for the premium rates for the upcoming year. To view the NCCI loss cost filing, individual classification codes, reports, and the final order of approval from the Commissioner of Insurance, visit the Workers’ Compensation page of the Division of Insurance website,dora.colorado.gov/insurance.
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Farm Credit of Southern Colorado employees served lunch to a great crowd at the Southern Rocky Mountain Ag Conference in February in Monte Vista.