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July 2015 E-Newsletter

Get the Most out of your Money: Start Saving for Retirement Early

An estimated 1.85 million Americans will graduate from college with an undergraduate degree this year, and most of them will enter the workforce rather than continue on to a graduate degree. As these twenty-somethings begin earning wages from "real jobs" for the first time, many overlook the need to start saving for retirement. However, saving early is the best way to get the most out of the money you set aside for retirement. It's also more important than ever.

With pension plans becoming increasingly rare and Americans living an average 22 years longer than they did when Social Security was created in 1937, today's youngest members of the workforce are largely responsible for their own retirement income. Here's a quick overview of the most common investment accounts used to save for retirement:

IRA - If your employer doesn't offer a company retirement plan (or if you're currently under- or unemployed), start your own nest egg by opening an Individual Retirement Account (IRA). These accounts provide tax advantages that a regular savings account does not. The maximum contribution to an IRA is $5,000 per year if you're under age 50. The money in IRAs is invested by the company managing the account and it is also easier to withdraw from than a 401(k). However, there are still several fees and penalties associated with early withdrawal.

401(k) - This type of retirement savings account is directed by employers and contributions are deducted from paychecks, before taxes. The account is then taxed when a withdrawal is made. The current maximum annual contribution to a 401(k) plan is $17,000. Also, many employer plans include a matching contribution, which is money that the employer will contribute to the account in addition to what the employee puts in. For example, if the company you work for has a program where they will match 50 percent of your contribution up to 3 percent of your paycheck, if you contribute the full 3 percent, you'll receive an additional 1.5 percent from your employer. That's free money for your retirement!

Roth vs Traditional - There are two types of both IRAs and 401(k) plans, Roth and Traditional. The basic difference is when you have to pay the taxes on the account. With a traditional retirement account the taxes are paid when the money is withdrawn. With a Roth account the taxes are paid upfront (when the money is added to the account). Roth accounts are especially valuable to young workers, as they are more likely to climb into higher tax brackets as they age, meaning they would owe more in taxes on the same amount of money later in life.

Notice that keeping cash under your mattress isn't on this list. Money that isn't invested or placed in a bank account earns no returns or interest. Make your hard-earned money work for you by investing in an IRA or 401(k) or depositing it into an interest-earning savings account (hint: PayPal doesn't have those). If you have questions about how to get started saving for your retirement, ask your employer's Human Resources personnel or talk to your local banker.


10 Attractions to Visit this Summer in Minnesota and Wisconsin

With the busy summer months upon us, it’s important to uproot from your office desk and take the entire family on a fun-filled vacation to let loose and enjoy your time together. Not sure where to go or what to do? Want to cut down on travel costs? Vacation in our own area and share the beauty of the Midwest with your family, while at the same time saving money by traveling close to home. To help you out, we have compiled a list of the 10 Attractions to visit this summer that will make lasting memories for your family, in both Minnesota and Wisconsin.

  1. Boundary Waters Canoe Area, Minnesota - If you love roughing it in the great outdoors, you should go on a thrilling canoe adventure at the Boundary Waters Canoe Area. Spend a night with your family at their camping grounds, go on challenging hiking trails, and enjoy beautiful scenic spots throughout the park.
  2. Door County, Wisconsin - Door County is perfect for outdoor recreation as well as the performing arts. There are 11 lighthouses, 300 miles of shoreline, and 5 state parks to enjoy. You can stay in any type of accommodation, including camping, bed and breakfasts, or even historic inns. You can go fruit picking, for apples or cherries depending on the season. There are also numerous concerts, outdoor theater performances, and outdoor sports to enjoy, such as hiking, birding, paddling, and more.
  3. Minnehaha Falls, Minnesota - Stare in awe at the beauty and grandeur of the famous Minnehaha Falls. Take pictures and go on challenging hiking trails or relax and have a picnic with the entire family at their picnic grounds. Other attractions include the Wabun Wading Pool as well as the Wheel Fun Rentals. 
  4. Olbrich Botanical Gardens, Wisconsin - The Olbrich Botanical Gardens cover 16 acres of gorgeous gardens, including the only Thai Pavilion within the continental US as well as the only one of its kind surrounded by garden outside of Thailand. There is also a rose garden, herb garden, Sunken Garden, and Perennial Garden. While at this attraction, visit the Bolz Conservatory, which is a 50-foot-high pyramid with a rushing waterfall, blooming orchids, free-flying birds, and tropical plants. You can look at carnivorous plants as well as those responsible for growing your favorite foods like vanilla, coffee, and bananas.
  5. Itasca State Park, Minnesota - With over 32,000 acres that covers 100 lakes, Itasca State Park is the best place for you to go hiking and experience nature like you never have before. Make sure to drop by the Itasca Indian Cemetery or the Wegmann's Cabin and spend a night with your family in their camping grounds right under the starry skies. For outdoor lovers, this is an experience that you should not miss.
  6. Waterparks in Wisconsin Dells, Wisconsin - Wisconsin Dells is known as the best spot in the state for fun at waterparks, and it is actually the "Waterpark Capital of the World." This is where the very first indoor water park was pioneered and houses the biggest concentration worldwide of indoor and outdoor waterparks. This means that you can look at just indoor waterparks or just outdoor ones and still have dozens of choices. Many of these parks have lodging right on site. This is also where you'll find Noah's Ark Waterpark, the largest outdoor one in the country.
  7. Valleyfair Amusement Park, Minnesota - Known as the upper Midwest's largest amusement park, this is the perfect place to take your entire family. From grandma and grandpa down to little toddlers, there is something fun and exciting that is in store for you here. They have family rides and thrill rides that will give you the adrenaline surge that you've been craving for. You can even check out the Dinosaurs Alive and Planet Snoopy attractions as well as spend a few hours splashing around at their Soak City Waterpark.
  8. Milwaukee Art Museum (MAM), Wisconsin - The Milwaukee Art Museum sees more than 400,000 visitors each year, making it one of the Wisconsin top 10 attractions. It has been open for 125 years and was the first art gallery in the city when it opened in 1888. Today, the museum has 30,000 pieces of art in 341,000 square feet of space. This includes the Quadracci Pavilion, the Kahler Building, and the War Memorial Center. The main area contains four floors with more than forty galleries and the collection spans every type of art and era, with photographs, drawings, prints, sculpture, paintings, self-taught art, folk art, and more. This includes European and American works from the 15th century on.
  9. Como Park Zoo and Conservatory, Minnesota - From tigers, elephants, monkeys, polar bears and giraffes to birds, fish and insects, you can get up close and personal with all these exotic animals at Minnesota's Como Park Zoo. You can also sign up for some interesting classes and group activities that will help you learn more about conserving animals and plants at the Conservatory.
  10. Lambeau Field and The Walk of Legends, Wisconsin - The Green Bay Packers are very important to the majority of Wisconsinites, and most visitors take advantage of their vacation to learn more. Lambeau Field is where the Packers play, and you can attend events here, watch a game, or visit the Atrium. There you will find the Packers Pro Shop as well as the Hall of Fame, which commemorates top players throughout the years. You can also go on a guided Stadium Tour to learn more. Exit Lambeau Field and go to the public art walkway just to the east of the building to enjoy the Walk of Legends. This is a collection of 24 statues that honor legendary eras of the Packers as well as the legends that made them great.

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4 Financial Lessons to Teach Your College Student This Summer

By the mere act of having children, parents destine themselves to take on a wide variety of roles during their lives. They can be doctors, coaches, guidance counselors, friends, teachers and even chauffeurs, but perhaps there is no more important role than that of financial advisor. The lessons you impart to your children during their high school and college years will stay with them for the rest of their lives, and could very well make the difference between a life of debt and a life of financial security.

As children leave high school and enter their college years, these financial lessons must increase in intensity. When children are home, the parents can watch over them and provide financial advice, but when they are away, they can be tempted by easy credit and luxury buys. Here are four financial lessons to teach your college student that will help him or her make wiser financial choices:

  1. Your High School Senior/College Freshman: If your children are about to graduate from high school and head out on their own into the college world, it is crucial that you take the time now to teach them about the reality of college costs. Sit down with your child and review what it will cost for him or her to attend college. Discuss the college financial aid that has been awarded, and how much will need to be covered from savings or federal and private student loans. Help your child project income and expenses during college and after graduation, so he or she can start learning now to live within a budget.
  2. Your College Freshman/Sophomore: The lessons must continue as you help your student review the financial ups and downs of the past year. Discuss the amount of credit that was used versus the amount of income that was available. If your child is already getting into debt, start constructing a plan to get out of it now. Talk about summer jobs, continue to look for college scholarships and put together a budget for the next year based on what has been learned.
  3. Your College Sophomore/Junior: Keep reviewing financial basics with your student. Talk about the credit card and student loan debt that has been acquired, and try to make projections for anticipated income after graduation. If your student's selected career field won't provide an income that will be able to repay these loans, something might need to change. Your student may need to consider finding additional sources of income, switching majors for a concentration that offers higher income potential, or transferring to a lower cost institution.
  4. Your College Senior/Graduate: You may think all the hard work is behind you, but some of it is only just beginning. Sit down with your graduate and review all of the student loan debt that has been accumulated. Try to consolidate student loans whenever it makes financial sense.

If necessary, involve the financial aid office at your student's school or financial aid advisors who can help you explain the available options. It may not be easy but it will be worthwhile because these are some of the most important lessons you will ever teach your child. Be a good teacher who gives your child a head start on the financial road to success and, who knows, you may even learn something that will benefit your own financial future along the way!


Business Corner: 10 Money-Saving Tips to Keep Your Business Cool This Summer

Did you know that air conditioning can comprise nearly half of all commercial electricity use in the summer? Talk about scorching energy bills! To help you save money, we have developed a list of the 10 best ways to keep your business cooling costs low in the summer heat.

  1. Blinds and shading. - Inside shading can reduce solar heat gain by 20 to 70 percent. Avoid black shades, and be sure to choose lighter-colored shades that will deflect the most heat. If possible, invest in exterior shading, which can repel 95 percent of the direct solar gain. Businesses with lots of windows facing the afternoon sun can expect significant air conditioning savings from exterior shading.
  2. Vents. - While a vital part of any heating, ventilation and cooling (HVAC) system, vents are easily overlooked. Keep vents unobstructed to increase air circulation. Also consider closing vents in seldom-used spaces to reduce air conditioning costs.
  3. Reduce waste heat. - Operating lighting and office equipment increases heat inside buildings. According to the government agency ENERGY STAR, lighting is the largest source of commercial property waste heat. Instead, use natural light, occupancy sensors and LED bulbs (which produce less heat than regular bulbs) when possible to reduce lighting costs and save on cooling expenses. If purchasing a business computer, consider a more energy-efficient model. Newer devices can use up to 90 percent less energy than standard computers and produce less waste heat.
  4. Fans. - Fans may be old-fashioned but are still a practical, inexpensive way to lower energy use. During milder temperatures, a fan can eliminate the need for air conditioning and keep a room cool for just a few cents per day. In the heat of summer, fans also help circulate air to keep you comfortable without cranking up the air conditioning.
  5. Programmable thermostat. - A programmable thermostat is a great way to improve efficiency. When no one is in the building, typically eight or more hours a day, a thermostat can adjust the temperature 10 to 15 degrees and reduce energy bills by 10 percent. Calculate your potential savings with this programmable thermostat calculator from ENERGY STAR.
  6. Change air filters. - Air filters tend to be out of sight, out of mind, but they should be changed every three months. This simple, do-it-yourself procedure will allow more air to flow through your system and result in lower operating costs.
  7. Tune-ups. - Just as a tune-up for your car can improve gas mileage and increase its longevity, a yearly tune-up of your cooling system can improve efficiency and comfort and extend the life of your air conditioner. Keep in mind this is generally a job for an HVAC specialist, however.
  8. Seal ducts. - According to ENERGY STAR, up to 20 percent of air that moves through ducts is lost due to leaks, holes or poor connections. Sealing often easily accessible or exposed ducts with long-lasting sealants or metal tape can be a simple do-it-yourself project. If they are in crawlspaces or around wiring and equipment that’s too hard to reach, hire a licensed contractor. It will be worth the money you spend.
  9. Seal the building envelope. - About 42 percent of energy is lost through doors, roofs, attics, walls, floors and foundations, reports the U.S. Department of Energy. Tackle these wasteful leaks by filling cracks and leaks with weather stripping. Typically there are gaps around windows, doors, light switches and outlets. Visit renewable energy site DSIRE to find tax and utility incentives for more extensive building upgrades, such as insulation and window replacements.
  10. Upgrade your HVAC unit. - Sometimes comfort comes down to replacing an old system. And now is a better time than ever to upgrade, with efficient heat pumps and new HVAC systems that use 20 percent less energy than those installed 10 or more years ago. For tips on how to purchase the best HVAC for your business, read “Five things to look for in a new HVAC system.”


Coulee Investment Center: Six Questions to Ask Older Parents

Shari-with-title-png.pngRegardless of whether you and your parents have always talked freely about money or never discuss the subject, there are several considerations you may want to address with them as they approach their later years. The six questions below can help you to start thinking about and planning for that conversation.

  1. What's the best way to introduce the topic of your parents' financial needs and goals? When you do decide it's time to "have the talk," tactfully make clear what you would like to discuss, but also let your parents know you respect their privacy.
  2. Are you confident that they are staying on top of their finances? Are bills getting paid on time? Are investments being monitored? Maybe you have already spoken with your parents about these money matters, but not in a long while. If you think they might appreciate a follow-up, it may be a good idea to check in again.
  3. Are they taking advantage of direct deposit, online bill paying, etc., to help simplify their financial life? If your parents aren't comfortable with technology and/or using a computer, offer to help or ask another trusted family member to chip in.
  4. Do your parents have an estate plan, and is it up to date? At a minimum your parents should have a will. If they don't, then the court system will step in and distribute their assets as it sees fit. In addition to having an up-to-date will, there are other planning considerations, such as shielding assets from estate tax. The federal estate tax exemption amount is $5.34 million in 2014 -- or double that amount for married couples. There are several ways to reduce the value of an estate: 
    • One is to make annual tax-free gifts of up to $14,000 (in 2014) to anyone they wish.
    • Another is placing assets in an irrevocable living trust. Income taxes on revenue-generating assets placed in such a trust are paid by the trust itself, not by them. In addition, the assets in the trust are not considered part of your parents' estate and are therefore not subject to estate taxes when they both pass away. However, "irrevocable" means that generally they cannot change beneficiaries or trustees once they are chosen; your parents also relinquish control of their assets once they are placed in the trust.
  5. Do you and your parents understand the potential benefits of the power-of-attorney designation? A power-of-attorney is a legal document that names an individual who will be charged with making financial or legal decision on behalf of another person, often a parent. This document can become very important should one or both of your parents become ill or incapacitated in some way.
  6. Should they consider a long-term care insurance policy? The average cost of a private room in a nursing home -- now topping $87,000 annually nationwide -- can put a tremendous financial burden on a family.1 For this reason, long-term care insurance can be a prudent addition to the financial plan of older parents.

For more information about any of the issues discussed above, contact our Financial Consultant, Shari Hopkins at 608-784-3904.

This communication is not intended to provide tax and/or legal advice and should not be treated as such. Each individual's situation is different. You should contact a tax and/or legal professional to discuss your personal situation.

For general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with a qualified investment, tax, or legal advisor.

1Genworth Cost of Care Survey, March 25, 2014.

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