Redefining Retirement: 4 Ways Retirement Has Evolved
How Does Debt Work?
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In This Issue
6 Team Spero Spotlight: MEMBER SOLUTIONS CENTER
8 Feature: DIFFERENT TYPES OF INSURANCE AND WHY YOU MAY NEED THEM
11 Family Finances: WHAT’S ALL THIS TALK ABOUT 529 PLANS?
14 Money Matters: REDEFINING RETIREMENT: 4 WAYS RETIREMENT HAS EVOLVED
16 What's Trending: HOW DOES DEBT WORK?
Letter from the President
Brian
McKay PRESIDENT
Dear Members,
The second half of the year is officially here. This means it’s a great time to do a money check-up to evaluate the status of your financial goals. Depending on your situation, you may look forward to doing so, or like many, you may find that just thinking about your financial situation stirs up negative emotions. At Spero, we want to do everything we can to help our members experience financial peace of mind. In short, we want to help you achieve financial security.
To most people, this means the ability to breathe easily when it comes to your money. When you’re financially secure, you can rest assured that you have enough income and savings to live comfortably now and in the future.
Savings, insurance, and debt management all play a role in helping you achieve this financial peace of mind. In this edition, we’re diving deep into each of these financial facets — from 529 Plans for your child’s education to understanding insurance to managing debt. I encourage you to set aside a few minutes to dig in.
No matter where you are on your financial journey, our team is ready to assist you in person, through TellerLink, over the phone, or, now, even via chat on our website!
And speaking of financial security, Spero’s Digital Banking is getting an upgrade in August — it’s been
reimagined just for you. With the upgrade, you’ll have better control over all aspects of your finances (accounts, loans, debit/credit cards, savings goals, credit score, and more)! Best yet, the features will be exactly the same whether you use your computer, tablet, or smartphone:
• Track spending and savings goals
• Set debit and credit card controls
• Check your credit score
• Customize account alerts
• And much more!
As you continue on your financial journey, we’re always here to help you soar.
I appreciate you!
Protect Yourself and Your Financial Future.
By combining valuable protection benefits with the opportunity to earn dividends, Rewards+ Checking1 provides everyday peace of mind while safeguarding your financial future. All for just $7 per month.
Enjoy the added security of these benefits:
ID Theft Expense Reimbursement2
Covers up to $10,000 in charges in confirmed cases of identity fraud.
Identity Monitoring2
Rest easy knowing IDProtect® monitors more than 1,000 databases for suspicious activity.
Mobile Phone Protection2
For a low $50 deductible, get reimbursed up to $400 for repairs and replacements for up to four phones.
spero.financial/rewards-plus-checking
1Benefits are available to personal checking account owner(s) and their joint account owners subject to the terms and conditions for the applicable Benefits. Some benefits require authentication, registration, and/or activation. Benefits are not available to a “signer” on the account who is not an account owner or to businesses, clubs, trust organizations, and/or churches and their members or schools and their employees/students.
2Special Program Notes: The descriptions herein are summaries only and do not include all terms, conditions, and exclusions of the benefits described. Please refer to the actual Guide to Benefit for complete details of coverage and exclusions. Coverage is provided through the company named in the Guide to Benefit. The Guide to Benefit document is available online.
Jalaysha B. Member Since 2022
Community & Events
Financial Workshop Calendar
Join us each month for our Financial Workshop Webinar series. From 12 p.m. to 1 p.m., you can hear from money experts on a range of topics that impact your financial health. RSVP at spero.financial/workshop.
Thursday, August 22
BUILD CREDIT FROM SCRATCH
Whether you have no credit history or are looking to rebuild credit, this workshop will show you why building a positive credit history is important and how to do so responsibly.
Thursday, July 11
KEYS TO HOMEBUYING
This webinar provides educational insights that will empower you to navigate the home-buying process confidently.
Wednesday, October 9
UNDERSTANDING CREDIT
This workshop will debunk common myths surrounding credit scores by clarifying how they are calculated, what factors affect them, and how to build and improve your score.
Spero Spotlight
A special thanks to all the members who joined us for this year’s Annual Members Meeting! If you weren’t able to make it, you can review our 2023 annual report and watch the meeting recording at spero.financial/annual-meeting.
Member Solutions Center
Improving our members’ financial lives isn’t just something we say; it’s something we do! Our Member Solutions Center is where we do it. Through each conversation, our Member Solutions Center agents aim to do just what their name implies — find a solution for any bump in the road our members may experience.
Continue reading to learn more about how our members drive our Member Solutions Center and how creating solutions is the heartbeat of both their mission and the mission of our entire organization.
Every Solution Is Inspired by You
Our Member Solutions Center is made up of representatives who love meeting the diverse needs of our members. Their passion for answering questions and turning any service disruption into a positive interaction shines through in each phone call, message, and interaction. The daily interactions at our Member Solutions Center are more than just transactional exchanges; they’re opportunities to connect during challenging moments.
make all the difference when our members face challenges on their financial journeys. With the “Golden Rule” in mind, our Member Solutions Center agents can offer knowledge and information along with a refreshing blend of understanding and compassion.
Member Solutions Center Representative Emily said, “Through personal experience, I know that when you call for help, you want the person on the other end to be understanding, knowledgeable, and caring.”
Driven by the goal of assisting members and creating solutions, this team also makes sure every member feels cared for and has a positive experience each time they call.
Jessica shared, “The proactive approach of helping the member establish automatic payments fostered long-term trust.”
Solving Challenges
Big and Small
Regardless of your challenge, our Member Solutions Center works to find a solution. While some members just need a little information, others may benefit from more extensive help — maybe without realizing it.
The Member Solutions Center team is ready and equipped to help our members find the solutions they need while putting a smile on their faces. Spero’s Lead Member Solutions Representative, Jo, said her favorite part of being a representative at our Member Solutions Center is “being able to ‘hear’ the smile on a member’s face!”
Whether a member is frustrated, concerned, or uncertain, our representatives meet them with kindness, care, and comfort — which can
Member Solutions Center agent Jessica described an interaction with a member who called to address some late fees. While a simple approach could have resolved the immediate issue, Jessica shared, “The proactive approach of helping the member establish automatic payments fostered long-term trust.”
Whether you have a simple question, need to overcome a big hurdle, or want additional guidance as you navigate your finances, Spero is here to help you find a solution. After all, every solution is inspired by YOU!
Different Types of Insurance and Why You May Need Them
Insurance is available for almost everything in our lives. From pet insurance to property insurance and everything in between, there’s a range of options to get coverage for various life events. We’ll be the first to admit there are a ton of options to choose from, but we’re here to help you choose the best coverage for your situation.
In this article, we’ll discuss several types of insurance, who needs them, and the benefits they offer.
Auto Insurance
Auto insurance is one of the most common types of insurance, as it’s needed by everyone who owns or drives a motor vehicle. While auto insurance is recommended for anyone with a vehicle, it isn’t legally required in every state. However, South Carolina requires drivers to have specific coverage in order to drive legally.
What Does Auto Insurance Insure?
Auto insurance provides financial protection during events that cause damage to someone’s vehicle or property or where someone is injured. There are many different types and levels of coverage to choose from based on your needs, but almost every state requires drivers to have bodily injury liability coverage and property damage liability coverage.
Bodily Injury Liability: Covers the cost of injury and death caused by the driver.
Property Damage Liability: Covers the cost of damage the driver causes to another vehicle or property.
Beyond these, many states require uninsured motorist coverage,
which covers you financially if a driver without insurance causes an accident or in the case of a hit-and-run. While the state may mandate bodily injury liability coverage and property damage liability coverage, these plans do not cover damage to your car. To cover this, you need to purchase collision and comprehensive coverage.
Collision: Reimburses you for damage to your car caused by a collision with another vehicle or object.
Comprehensive: Provides coverage for theft and damage caused by incidents other than collisions, such as fire or vandalism.
The good news is that, as a Spero Financial member, you can access discounted rates through the TruStage Auto Insurance Program! Your credit union membership could result in big savings, so be sure to compare rates to ensure you’re getting the best one. (We’re not kidding about the savings. Spero’s Chief Strategy Officer just saved $750 by making the switch!)
Homeowners/Renters Insurance
Another type of insurance that everyone could benefit from is homeowners or renters insurance, which can protect you from financial loss if something happens to your home or property (think fire or even a tree falling on your home). While not required by law, many lenders and property managers require it as a condition of your mortgage or lease.
There may be situations where homeowners insurance isn’t required, but it’s a good idea to get coverage anyway. After all, your home is one of your biggest financial investments.
More good news: As a Spero member, you could save on your home insurance and receive discounted rates through TruStage Home Insurance.
Health Insurance
While health insurance is not required, it can offer significant financial relief for certain medical and
health-related expenses. Many employers offer health insurance plans, but if you don’t have access to a plan through your employer, you can obtain a plan on your own at healthcare.gov. Various coverage options are available, so be sure to evaluate your and your family’s health needs before deciding on a plan.
Hospital Accident Insurance
In the medical realm, hospital accident insurance can be a valuable addition, as it pays a daily benefit for each day you are in the hospital. The benefits can be used in multiple ways, including deductibles, co-pays, out-ofpocket expenses, or other expenses that occur while hospitalized. By joining efforts with Franklin-Madison, Spero offers our members this type of insurance. Visit the insurance page on our website for all the details.
Life Insurance
Life insurance is another option that can benefit many and provide a financial safety net if the policyholder passes away. If you’re unsure whether you need life insurance, one major consideration is whether anyone relies on you for financial well-being or support. If you have children, a spouse, or anyone else you support, life insurance is worth considering.
Life insurance policies can vary depending on the type, term length, payout amount, policy premium, and more. Through your membership with Spero, you can access affordable life insurance policies via TruStage.
Accidental Death and Dismemberment Insurance
Accidental death and dismemberment insurance provides you or your loved ones a cash benefit after an accident that results in injury or death. This type of insurance can supplement health insurance or life insurance policies and provides additional financial assistance in the event of an accident. As a Spero member, you are eligible for $1,000 coverage at no cost! To learn more, visit the insurance page on our website.
While this list isn’t exhaustive, it is a good starting point for anyone deciding what kind of insurance coverage they need. You may benefit from certain insurance plans more than others, so be sure to explore each type based on your situation and family needs. For more information on insurance coverage available to you as a Spero member, visit our website.
What’s All This Talk About
529 Plans?
A 529 Plan is an investment account
specifically meant for saving for college (and now even private school tuition if you choose). It’s a go-to investment account for many parents due to its tax-free benefits. Exempt from federal taxes, this account allows beneficiaries to make tax-free withdrawals for specific purposes. It can fund qualified educational expenses such as tuition, room and board, books, and supplies. Traditionally, there have been strict guidelines on the usage of 529 funds. While many of those guidelines are still in place, recent additions and expansions have allowed more flexibility for contributors and beneficiaries.
In this article, we’ll review a few basic facts about the plan and highlight the most recent update, as it may be helpful if you currently have a 529 Plan or are considering opening one in the future.
The Traditional Plan Details
While there are many options, variations, and nittygritty details when it comes to 529 Plans, a few core basics make up the plan’s nature.
Fund Usage
529 Plans are intended to pay for college, K-12 tuition, apprenticeship programs, and student loan payments. At their core, these plans are investment accounts that work similarly to 401k or IRA accounts. They offer tax-free growth and withdrawals for qualified education expenses.
Fund Options
You can open a 529 Plan in one of two ways: directsold or advisor-sold. While direct-sold plans offer lower fees, you are responsible for selecting the investments. Advisor-sold plans are opened through a licensed financial advisor, and they are responsible for choosing the investments.
While these are the basics, there are many more details and caveats to 529 Plans. If you are considering opening a 529 Plan, we recommend looking into the details about account opening, beneficiaries, contributions, investment portfolios, withdrawals, and more.
The Latest Update
Current 529 Plan owners and those who may be opening an account will be glad to know that some updates earlier this year made these college saving accounts more flexible!
The SECURE 2.0 Act
Before the SECURE 2.0 Act, 529 Plans were highly restrictive. When a 529 was opened, the funds were essentially tied to one type of usage, with any other usage receiving hefty penalties such as fees and taxes, which could be a 10% penalty plus income taxes.
As of January 1, 2024, the SECURE 2.0 Act went into effect, allowing account holders to roll unused funds into a Roth IRA without penalty. Thanks to this new update, plan contributors and beneficiaries can feel more at ease regarding savings that aren’t needed for educational expenses.
While there was some flexibility in transferring plans to alternate beneficiaries, this update lets plan owners roll over funds into a beneficiary’s retirement account — allowing them to save for college and retirement at the same time. This update removes hesitations regarding account funding if the named beneficiary does not pursue higher education or incur qualified education expenses.
As with everything, rolling over funds to a retirement account has rules and caveats. There are lifetime limits, yearly contribution limits, plan ownership rules, and eligibility requirements. Be sure to look into these details before opening a 529 Plan or attempting to roll over funds.
Your 529 Plan Resource
If you’re considering opening a 529 account or any other college savings plan, Pinnacle Wealth Management is an excellent resource to guide you through the process. Their advisors are equipped to help you discover the best fit for your needs and goals. Contact a Pinnacle Wealth Management advisor today to learn more about college savings options and what plans are best for you.
Scan to learn more about investments with Spero Financial.
Redefining Retirement: Four Ways Retirement Has Evolved
Since the 19th century, retirement has been the life stage in which we no longer work full-time. With Social Security, Americans can collect retirement benefits as early as 62. But while retirement remains a relevant concept, its purpose has changed for many Americans, creating what is now known as “modern retirement.”
The New Norm for Retirement
Traditional retirement marked the end of one’s professional career and revolved around relaxation and leisure. But the reality is that this form of retirement may no longer be practical. And for many, it’s not even desirable. Americans’ life expectancy is rising, and with it, the probability of outliving standard Social Security benefits. Beyond the financial strain of traditional retirement, many retirees struggle to find a sense of purpose. Enter modern retirement: a time later in life dedicated to pursuing new experiences, personal growth, and passions. Retirement is no longer just about rest; it’s a time for fulfillment and productivity. And it might just be the key to living a more fulfilling life during the Golden Years.
Four Ways Retirement Has Changed
Retirement has become more flexible and dynamic. In effect, you can make it whatever you want or need it to be. Here are a few ways retirees are changing what it means to retire.
01Traveling more
Many people spend their lives dreaming of places they want to visit, but time keeps getting in the way. Retirement gives them the time to enjoy what the world has to offer. With supplemental income streams (we’ll touch on that next) and a strong desire for personal fulfillment, the latest wave of retirees is more ready and willing to seek adventure and new experiences — often in the form of travel.
03 Pursuing passions
Working isn’t the only way to find meaning during retirement. There are multiple ways to pursue passions; it just requires someone to be open to new experiences. Once new interests are identified, retired individuals can chase after them through educational courses, new hobbies, or even volunteer opportunities.
02 Working part-time
Retirement is no longer defined solely by the end of one’s career. Some choose to work full-time into their 70s, delaying their Social Security benefits and lowering the chances that they’ll outlive their retirement funds. Others look for part-time work to find a sense of meaning and purpose. And the extra money certainly doesn’t hurt!
04Becoming a caregiver
Rising life expectancy has impacted our society in many ways. As Americans are joining their parents in retirement, they may simultaneously be taking on the role of primary caregiver.
This role may require an adjustment of retirement expectations as new retirees may have less down-time and more responsibilities. But in many instances, the busyness of caregiving provides the exact purpose and drive retirees are looking for.
Financial Security Matters More Than Ever
This new retirement model offers many benefits, including the opportunity to engage in activities that promote physical and mental well-being. But what about financial well-being?
If retirement funds are a point of stress in your life, this reimagined version of retirement may be right for you. It doesn’t throw all retirement planning out the window but rather gives you more time to plan and build your savings. But a longer life expectancy also means more time spent in retirement, so it’s essential to plan accordingly. After all your hard work, retirement — however you define it — is well-deserved. You might as well enjoy it!
How Does Debt Work?
If you’ve scrolled through any form of social media lately, you’ve probably seen videos of users showing off their shopping hauls, whether it be the newest makeup from Sephora or athleisure dupes from Amazon. The problem with this trend is that when the shopping total is higher than expected, it’s all too easy to swipe a credit card without worrying about the immediate impact on your bank account.
Many Americans view credit cards as free money. Whether this idea is the result of slick marketing or a lack of financial literacy, it couldn’t be further from the truth. When used unwisely, credit cards can severely damage your financial health, and the lasting effects of poor credit habits can make it difficult to achieve financial freedom and security.
So, are credit cards good or bad? The answer is more complicated than you might think, and it starts with defining debt and how it works.
Defining Debt
Debt is defined as any time one party (the borrower) owes money to another (the lender). When applying for a loan, you should distinguish between good and bad debt. Good debt is used to acquire assets or make investments that generate long-term value. Bad debt, on the other hand, is acquired when loans are used to purchase depreciating assets that lack long-term financial benefits. These loans typically have higher interest rates and can cause financial strain.
How Debt Works
Sometimes, you may need to make an essential purchase that exceeds your budget. If that happens, you can apply for a loan or line of credit from a lender. You and the lender will agree on the amount loaned (the principal) on the condition that you’ll repay the loan with interest added over a certain period (the term).
It’s critical to make regular, on-time payments. And the sooner you pay off your debts, the more you save on interest — and the better your credit score.
Calculating Your Credit Score
Your credit score is a numerical representation of your creditworthiness, ranging from 300 to 850. It demonstrates your ability to repay borrowed money.
Several factors determine your credit score:
• Payment history (35%)
• Amounts owed (30%)
• Length of credit history (15%)
• New credit (10%)
• Types of credit used (10%)
So, back to our original question: Are credit cards good or bad? The answer depends on you. The fact is that credit cards are debt and often charge high interest rates if you hold a balance. So, use your credit cards wisely. If you’re able to pay them off at the end of each month, they can help you
To ensure you have a good credit score, we recommend the following:
• Make regular, on-time payments toward your debt.
• Try not to use more than 30% of your credit limit.
• Keep older credit accounts open to maximize your available credit and maintain your positive credit history.
• Avoid opening too many lines of credit over a short period.
• Use a variety of credit types and manage them wisely.
Tips for Managing Debt
When it’s managed well, debt can be a good thing. With a few simple debt management tips and tricks, you can be on your way to soaring financially.
1 | TRACK YOUR SPENDING
Tracking how much you spend (your expenses, including debt repayments) and how much you regularly bring in (your income) can go a long way when working to pay off your loans. By not spending more than your income, you’ll ensure that you don’t fall behind and enter a cycle of borrowing.
2 | CREATE A DEBT REPAYMENT PLAN
Organize all your debts by interest rates and minimum payments. Then, develop a strategy for paying each one off. With the snowball method, you start by paying off your smallest debts and working your way up. Or, you can try the avalanche method, which involves paying off your debts with the highest interest rates first and working your way down..
3 | BUILD AND MAINTAIN GOOD CREDIT
Start by evaluating your current credit score and determining how it can improve. Make payments on time and keep your credit card balance as low as possible, as your debt-to-income ratio plays a big part in determining your financial health.
rack up some serious rewards. But if you can’t pay off the balance in full, be careful. While the last-minute purchase or shopping haul may offer instant gratification, we’re here to tell you that maintaining a healthy credit score will be far more satisfying in the long run.
