Back-to-School Child Identity Theft Protection 101
Perhaps you take your 16-year-old to get her long-awaited driver’s license—and find her application denied because another person already has a license that uses her Social Security number (SNN). Or maybe you open your mailbox one afternoon to find a pile of bills and bank statements; all in the name of your 7-year-old son.
Child identity theft is a serious problem, accounting for 6 percent of all identity theft complaints last year, according to the Federal Trade Commission (FTC). And because children are unlikely to apply for credit cards or check their credit reports until around age 18, such thefts can go undetected for years. In the meantime, by using your child’s SSN or other identifying information, a thief can fraudulently apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live.
While children can fall victim to such fraud at any time of year, the initial back-to-school weeks — when countless school forms change hands and kids head off clutching new cell phones and laptop computers filled with private information — are particularly risky. Help protect your children from becoming victims of identity theft by taking these steps:
Closely Read School Forms: Many schools send home a stack of forms to be filled out for your children, from waivers for sports teams to emergency contact information and health forms. Find out how your child’s information will be used, whether it will be shared and with whom. Make sure that the school’s records are stored in a secure location. Know that under the federal Family Educational Rights and Privacy Act (FERPA), the privacy of your child’s student records is protected. You have the right to inspect and review these records, approve the disclosure of personal information, and ask for corrections.
Be Proactive with School Directory Information: Schools frequently compile a student directory that contains a wide variety of personal information, including your child’s name, address, date of birth, telephone number, email address, and photo. Student directories are usually available to other families in the school and even to the general public. Under FERPA, you have the right to opt out of the release of directory information to third parties, including other families. If you do decide to opt out, be sure to put your request in writing.
Guard your Child’s Social Security Number: Never share your child’s SSN unless you know and trust the party who is asking for it. Ask why it’s necessary and how it will be protected. It’s often possible to use a different identifier, or only the last four digits of the SSN. Be sure to shred any documents that contain your child’s personal information before tossing them in the recycling bin.
Beware of Backpack Labels: Children are apt to lose things so it’s tempting to whip out the Sharpie and write your child’s identifying information on important possessions like backpacks — which may even have house keys attached. Don’t write your home address or home phone number on the backpack’s identifying nametag; a thief could find easy entry to your home (and all the personal information it holds). Instead, just include your child’s name and your name, and a work telephone number where you can be reached.
Keep Information on Laptops and Cell Phones Secure: Many kids set up their electronic devices to automatically log in to their favorite apps, email, and social media once they open the device. Should thieves get a hold of the device, they can gain easy access to a host of personally identifiable information, including credit card information, addresses of family members and birth dates. Explain to your children the importance of establishing a creative alpha-numeric password to unlock the device. And remind them never to store sensitive information, such as their SSN or passwords, on their cellphone or laptop.
Do a Credit Check at Sweet 16: The FTC recommends checking to see whether your child has a credit report around the time of his/ her 16th birthday. If you find one, and it includes signs of fraud or misuse, you’ll have time to rectify the situation before your child applies for a loan for tuition or a car, or needs to rent an apartment.
If you suspect that your child’s personal information is at risk, whatever his/her age, begin by contacting each of the three nationwide credit bureaus to check for a credit report. For information on other steps to take and advice on how to repair any damage, visit the FTC’s consumer information website. Customers with fraud protection like Deluxe Provent, offered at Coulee Bank, can also be alerted to suspicious activity with account monitoring. For more information, click here.
Have You Saved Enough to Retire?
Approaching retirement should be an exciting time in your life - you have traveling, spending more time on hobbies, and generally enjoying your golden years to look forward to. However, for many, retirement is a source of stress and anxiety instead. Have you saved enough? Do you need to keep working part-time? How will you pay for unexpected medical bills? These questions keep many boomers up at night. Here are some questions to ask to help give you peace of mind:
When Did I Start Saving?
One of the most impactful factors in determining how much retirement savings you'll have is when you started putting money away. Thanks to the magic of compound interest and the general positive rate of return in the stock market, starting at age 25 instead of age 30 can net you nearly $100,000 extra by the time you retire. So, if you've been consistently putting money into your retirement account since your 20s or early 30s, you're probably in good shape.
How Much Do I Need to Save?
Assuming that you retire at age 67 (the average) and have an average lifespan (most investment advisors recommend assuming 92 years for men, 94 for women), you need approximately eight times your annual salary in order to retire without accepting major lifestyle changes. Using your salary as a retirement savings benchmark means salary growth becomes a factor as well. The faster your salary grows throughout your career, the more you'll need to save in order to replace an acceptable proportion of your final salary in retirement.
When Do I Plan on Retiring?
Another important factor in determining how much you need to save for retirement is the age at which you plan to quit working. The longer you can postpone retirement, the less you need to have in savings when you do. For example, by retiring at age 67 instead of 63, you have an additional four years of income and savings, as well as four fewer years of retirement to consider. In addition, postponing your retirement age makes you eligible to receive higher monthly payments from Social Security.
How Much are You Allowed to Save?
Different retirement savings accounts have different rules about how much you are able to contribute each year and whether those funds are taxed now or when you withdraw them in retirement. Check into how much you're currently deferring as part of your workplace savings plan and if you could be setting aside more. If you have maxed out your workplace savings plan, IRAs are another good option. There are also catch-up provisions that allow people age 50 and over to save more in both IRAs and workplace savings plans.
If you're still not sure where you are with your retirement savings, or want to learn how you can start saving more, talk to your banker about your options.
Preparing Financially for a Stressful Life Event
No one wants to think about it, but everyone needs to plan for the possibility that they may suddenly become disabled or die. Taking a few steps now can make it much easier for your loved ones to manage your financial affairs when you can't. Here are a few tips to get started.
Build a Rainy Day Fund: "Savings can help you and your family get through difficult times, especially if there's a major health issue or other life event that may result in you earning less income," said Mark Pearce, Director of the FDIC's Division of Depositor and Consumer Protection.
Financial experts generally recommend that you set aside at least three to six months of living expenses to get through a difficult period without having to take out a loan or borrow from retirement savings. "Having even a small amount of money automatically transferred on a regular basis into a federally insured savings account is a great way to gradually build a cushion to help manage unforeseen situations," Pearce added.
Keep a List of your Financial Accounts and Personal Documents in One Secure Place: Ensuring that a loved one responsible for your affairs can easily find a list of your deposit accounts, investments, loans, and other assets or obligations will save them time and avoid risks of unnecessary expenses (such as fees associated with certain old, "dormant" accounts). Other paper records that your heirs may need to know where to find include wills, home titles, car titles, bonds, and certificates of deposit. But this list can also be valuable to a criminal, so keep it in a secure place that only you and selected others have access to.
Consider the Pros and Cons of Consolidating Accounts: Think about how many savings, checking, investment, and credit card accounts you have. Then ask yourself if combining multiple accounts could make it easier for your loved ones to identify, monitor, and manage those accounts on your behalf. If you plan to consolidate your deposits at one institution, make sure the combined funds are within the FDIC's deposit insurance coverage limits. Remember that you can have more than $250,000 in one bank and still be fully insured provided that the money is in different ownership categories — single accounts, joint accounts, retirement accounts, and so on.
Consult with an Attorney about Legal Documents to Create or Update: One example may be an advance directive that will specify your wishes for medical care if you are terminally ill. Others may include a will and/or a trust to guide the distribution of your property after your death, and a "power of attorney" authorizing someone else to handle transactions and make decisions on your behalf if you become mentally or physically incapacitated.
Carefully Evaluate Who You Hire to Help You: You may want to talk to a financial advisor for help, such as in deciding whether to consolidate accounts or sell investments. Before choosing an advisor, understand what training he or she has had and any record of complaints. For tips on choosing an investment advisor, including what professional designations (the letters after an advisor's name) mean, start at www.finra.org/Investors on the Web site of the Financial Industry Regulatory Authority; an independent, not-for-profit organization authorized by Congress to help protect investors.
Determine if You Have Adequate Insurance: Consider discussing with an insurance agent or a financial planner whether you have adequate life and disability insurance, and evaluate the pros and cons of long-term care insurance. Your needs will depend on factors such as whether you have dependents and any property that you would like to pass to an heir but is serving as collateral for a debt. Note: In general, your debts will be paid from your estate and will decrease the money that your heirs could inherit. But exceptions exist. For example, the responsibility to repay any debts that another person co-signed with you shifts to that person after you die.
Take Steps to Make it Easier for Your Heirs to Access Your Valuables: Start by confirming that the beneficiaries or co-owners you want on accounts are named in the records. For example, having joint accounts with your spouse or another loved one can make it easier for him or her to access the account if you become disabled or die, but you are giving this person equal rights to the money in that account. You can also set up payable-on-death (POD) accounts at a bank that would ensure that the people you name would have access to the money after you (or any other co-owners) die.
And if you have a safe deposit box, talk to a bank employee or an attorney about how a loved one or another person you designate could access the box. Procedures vary considerably by state. For example, after a death, some state laws may permit a decedent's safe deposit box to be accessed immediately by a co-owner, but other states may generally not permit anyone to remove any items other than a will and burial instructions for several weeks.
Financial Tips for College Students
Many college freshmen have moved into their dorms, eager to enjoy the new freedoms life away from home has to offer. However, many college students are also managing their finances alone for the first time. A brand-new credit card, books, and room and board costs are just a few of the financial balls new students have to juggle. Here are a few tips to help freshmen manage their finances away from home.
Create and Follow a Budget: Establish what your income is each month, whether that's from a work-study stipend, part time job, etc. Then, subtract all your debts, including what you spend on housing, food, gas, and loans. Once you have a good idea of how much you can spend each month, set aside a portion of that for an emergency fund. Be sure to update and adjust your budget monthly according to your actual spending. Your budget won't help you control your spending if you set aside $100 per month for groceries but regularly spend $200. Set yourself up for success with a realistic monthly budget based on your actual spending habits.
Use Credit Cards, but Use Them Wisely: Credit cards aren't evil and they don't automatically trap the people that use them under a mountain of debt. In fact, it's a good idea for students to use a credit card regularly in order to help build a credit history. However, this strategy only works in your favor if you pay off the full balance each month and never use the credit card to buy something you couldn't buy that same day with cash. That approach will keep you from using credit to live beyond your means, while still helping you establish a good credit score.
Look for Student Perks: Many restaurants and stores have special discounts for students with a college ID. Make sure you take advantage of these extra opportunities to save money. Renting your textbooks or buying them used can also save you hundreds, and many booksellers offer discounts for college students. Finally, don't visit the coffee shop every morning for your dose of caffeine, even if they do have a student discount. Making your coffee in a dorm-sized coffee machine can save you $90 every month - more if you typically buy expensive coffee drinks.
Save Early and Often: Retirement may seem like a long way away, but if you're able to contribute to an IRA now and roll it into a 401k when you start working full-time, it will have a tremendous impact on your retirement savings.
Keep these four tips in mind and you'll avoid major financial pitfalls throughout college.
Security Tip of the Month: Data Privacy Day
Data Privacy Day, held annually on January 28th, is an international effort to empower and educate people to protect their privacy and control their digital footprint, and make the protection of privacy and data a great priority in their lives. To protect your privacy, follow these quick tips:
Use unique passwords for all financial online accounts. Never share or duplicate usage of your password, account number, PIN, or answers to security questions.
Monitor all of your financial accounts and report any suspicious activity, such as false or multiple charges, to your community bank immediately. The sooner you alert proper authorities about suspicious activity, the sooner it can be resolved.
Do not save credit or debit card, banking account or routing numbers, or other financial information on your computer, phone, or tablet.
Be vigilant about using a password on mobile devices. Be sure to set your devices to automatically lock after a selected period of time to ensure no one can access your smartphone, tablet, or laptop.
Do not provide your secure financial information over the phone or Internet if you are unsure of who is asking for it. Contact your community bank directly by using the phone number on the back of your debit or credit card, or stop in your bank to speak with someone in person. Remember, your community bank will never contact or text you asking for personal or banking information. Assume any unsolicited text request is fraudulent.
Be aware of the location of your mobile devices (smartphones, tablets) at all times. Only log on financial websites when you have a secure, safe, and trusted Internet connection.
For additional information about Data Privacy Day, visit Stay Safe Online's website at www.staysafeonline.org.
Business Article: The Best Financial Advice for Small Business Owners Now
As a small business owner, there are many challenges that you can face. But there are some smart things that small business owners should consider doing now. Here are the top 3 tips:
Access Capital Now: We’re five years out from the Great Recession and the start of the financial crisis that all but dried up access to capital especially for small businesses. That’s changing now as banks have money to lend and more of an appetite to lend it. The requirements are still the same, like having good credit and a solid business plan, and you may need to be prepared to personally guarantee the loan. Most small business owners should consider accessing capital for three reasons:
Expanding your business by buying another company, launching new products, or services or hiring new employees
Refinancing any old debt at today’s lower interest rates
Establishing a line of credit (LOC) for a rainy day. You may need the liquidity a LOC provides to occasionally meet day-to-day business obligations like payroll or temporary cash crunch needs.
Engage Rather than Employ: Great consultants exist in many parts of the U.S. So rather than hiring for a position that may be just part-time, like a marketing strategist or legal counsel, consider retaining a consultant that is an expert in their field. Keep in mind that many of these consultants left big companies to start businesses of their own. The best benefit to hiring a consultant is that they cross-pollinate; they work with dozens, maybe hundreds, of other businesses and bring a perspective and advice formed by best practices from working with many clients. This insider’s view can help you avoid costly mistakes and enhance any number of areas of your business.
Have a Lean Start-Up: If you’re starting a business or launching a new product, you don’t need to start with the grandiose office or spend years developing a finalized product or service before you launch. Instead, test your vision by launching a more rudimentary form of your concept to gain interest and feedback. Companies like Starbucks or Proctor and Gamble test new concepts on smaller markets before launching their products worldwide. Small companies can learn from this approach. Develop a prototype to get the product out, launch it in smaller markets, test it, get feedback, pivot, and then refine it. By using this cost-effective process, you’ll have a refined product or service designed to the taste and needs of potential clients because they told you what they liked and wanted along the way.
As the economy continues to improve, small businesses will have more opportunities to expand and grow. By taking advantage of opportunities that exist now, you’ll improve your chances of success.
Coulee Investment Center: Social Security Seminar: October 28th, 2014
Social Security continues to play a critical role in a retirement strategy. Is yours taking full advantage of what Social Security offers? I can help. Together, let’s rethink your retirement. During my Social Security Seminar on October 28th, I’ll share seven keys to enhancing Social Security benefits:
Keys to help you understand the basics of Social Security, including when you should start taking benefits.
Keys that take a deeper dive into Social Security, such as working in retirement.
Finally, taking the next step at this insurance sales presentation with the Rethinking Retirement strategies.
Join me at the Coulee Investment Center, located inside Coulee Bank at 1516 Losey Blvd S., La Crosse, WI. Reception starts at 5:30pm, with a 6:00pm presentation. Space is limited, so please call me at 608-784-3904 to register today.