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September 2020 E-Newsletter

How to Move Safely During a Pandemic


Moving during pandemic
Moving is stressful enough without throwing a pandemic into the mix. If you’re considering moving, here’s what to know from a financial standpoint, as well as tips to make moving day safer.

Many Americans may be forced to consider moving as federal foreclosure and eviction moratoriums expire. In the first week of July, 32% of Americans did not make a full, on-time housing payment, according to a nationally representative survey by the website Apartment List. Others may relocate to save money, be closer to loved ones or simply leave a densely populated area.

Budget for extras
Aside from the usual expenses like buying boxes, renting a van or hiring movers, plan for extra costs because of the pandemic.

You may need to buy heavy-duty supplies to deep-clean your old place, for example, or to sanitize your new accommodations. If you are moving out of a rental unit, some landlords may ask you to pay for professional cleaners or take the cost out of your security deposit.

Moving across county or state lines? Check what the quarantine requirements are in your new location, says Jean Wilczynski, a certified financial planner and senior wealth advisor at Exencial Wealth Advisors in Old Lyme, Connecticut. You may have to pay for quarantine accommodations like a hotel or Airbnb if your new apartment or home is not move-in ready, she says.

If you are receiving unemployment benefits, check the rules on how your benefits carry forward in your new location and what the taxes are if it is a new state, Wilczynski says. You can typically find this information on your state’s Department of Labor website, she says.

If you are unemployed or your income has dropped as a result of the pandemic, you can also check whether you qualify for moving assistance by calling 211.

You might not be able to really get to know your new place until you’re living there, so prepare yourself (and your wallet) for surprises like leaky faucets or broken appliances. Landlords and real estate agents may offer only virtual tours. And if you can see the new accommodations in person, you may be required to sign a waiver, wear a mask and avoid touching anything while in the house.

Stay safe during the move
How to move safely depends on whether you are doing it yourself or using movers. Current guidance from the Centers for Disease Control and Prevention suggests that the main way the coronavirus spreads is through respiratory droplets, says Lindsay Slowiczek, pharmacist and drug content integrity manager at Healthline.com. That’s why wearing a mask and staying away from people is important to slow the spread of the virus, she says. Sanitizing surfaces is also an extra precaution worth taking.

Moving yourself
If you’re renting a moving truck, companies like U-Haul offer contactless pickup and drop-off options. Slowiczek suggests sanitizing the door handles, steering wheel, radio and the metal tongue on the seatbelt in the rental van.

Using movers
Before picking a moving company, check its website or call and ask about its safety practices in response to the pandemic, Slowiczek says. Ask whether the movers wear masks and gloves during the move.

On moving day, she suggests being prepared with a plan to limit interaction with movers and maintain social distancing. This includes packing as many things as you can yourself, or consider using a self-pack moving container as Slowiczek did for her own recent move.

If the movers will pack the truck, create a schedule for the movers. For example, ask them to start with a particular room as you stay in another. This is also particularly useful if you live with family members who are vulnerable or immunocompromised, she says. Try to limit their involvement with the move as much as possible.

“Plan out the way [the movers] are going to move through the house,” says Slowiczek. “If possible, move all of [your boxes] to one area in your home so they don't have to come throughout your house as much.”

Keep hand sanitizer or soap handy during the move so that you and the movers can use it periodically, she says. (Check on the FDA website that your brand of hand sanitizer is methanol-free, Slowiczek adds). After the move, use disinfectants registered with the Environmental Protection Agency to clean surfaces or furniture.

“Just using the product as-is is not enough — read the instructions on how long it should be wet on the surface,” Slowiczek says.

The article, How to Safely Move During a Pandemic, originally appeared on nerdwallet.com

Does Marriage Have to Mean Merging Money?

MarriageMarriage is made up of about a thousand daily decisions — and 700 of them involve money.

Often, one of the first and biggest is whether to merge finances. A 2020 NerdWallet survey conducted online by The Harris Poll among more than 1,500 U.S. adults who have a significant other found that more than three-quarters of respondents (77%) combine their finances at least partly — but the likelihood varies by age. Perhaps unsurprisingly, almost half (48%) of Generation Z adults (ages 18-23) with a significant other say they don’t combine their finances, compared with 23% of millennials (24-39) and 20% each of Gen X (40-55) and baby boomers (56-74).

But statistics can’t determine what’s right for you and your partner. “All couples are unique, and they have to create the financial blueprint that’s going to fit their relationship best,” says Liz Higgins, licensed marriage and family therapist at Millennial Life Counseling in Dallas, Texas.

Here’s how some couples have approached merging and what to consider as you make your own decision.

Merging money: the pros and cons
Most couples still combine finances, and Kiersten and Julien Saunders, a Smyrna, Georgia-based couple who blog about money at Rich & Regular, found that to be the easiest route. It eliminated the stress of tracking multiple accounts, and Julien says it gave the couple “one single, simple point of view on spending.” It also helped them consolidate points and other card rewards.

“We’ve never made the same amount of money, so figuring out the ratios of who should pay what was always very complicated,” Kiersten adds. “This makes it easier.”

Of course, giving your partner a window into your spending isn’t always ideal. According to NerdWallet’s survey, among those who don’t combine finances with their significant other, about 1 in 5 (21%) say they don’t want to explain or justify their expenses. “It can make you defensive about your purchases,” Kiersten says. For example, “If you get your hair done, and it’s $200, and your spouse is like, ‘You paid $200 for that?’ It leads to conversations about how you value things.”

When working with couples, Riley Poppy, a certified financial planner and founder at Ignite Financial Planning in Seattle, facilitates these discussions before setting any goals. Other couples choose premarital counseling. “It forces you to have those difficult conversations,” says Melissa Neacato, Ann Arbor, Michigan-area author of the Traveling Wallet blog, who went through the process with her husband.

A joint account can also ease major life transitions. When Neacato was laid off, “[My husband and I] still had to have discussions about how we’d adjust our budgeting, but we had already set the groundwork for it being our money,” she says. “There was no need to ask permission” to use their joint funds.

Separate accounts: how it can work
Neacato and her husband also each give themselves an allowance from their joint account every month. “I think it makes for less friction for things that only affect one person,” such as meals out with friends, she says.

And Higgins says she’s seeing more couples take a hybrid approach. “They’re fairly established as individuals, so there’s not really this need or desire to join 100%,” Higgins says.

Other couples choose not to merge finances at all — almost a quarter (23%), according to NerdWallet’s survey. Debt is one major reason, according to Jennifer Silvas, tax manager at Sensiba San Filippo, a Bay-Area accounting and consulting firm. Keeping money separate might also be smarter for folks entering second marriages or high-income couples. And “some people … want to have their own money and spend it however they want. It’s a personal preference,” Silvas says.

Mark Patrick, a St. Louis-based blogger at Financial Pilgrimage and financial services professional, says he and his wife, Dawn, decided to keep separate accounts because they’d done so prior to marriage. “If it ain’t broke, don’t fix it,” Patrick adds. According to NerdWallet’s survey, almost 3 in 10 (29%) of those who don’t combine finances with their significant other agree — they don’t see the point.

Like couples who’ve combined money, though, Patrick and his wife talk finances regularly. They’ve historically split household bills so each has a similar amount of discretionary cash. And they abide by certain ground rules: Both have agreed not to accumulate credit card debt and discuss purchases of more than a few hundred dollars.

If you do choose separate accounts, it’s best to set up documentation such as a living trust, in case one of you passes away. “That trust can spell out who gets what, where things are going to ultimately go,” Silvas says.

Opening a joing account: what to know
When it comes to starting a joint account, you’ll first pick a bank. What makes a bank good for an individual also makes it good for a couple. If you’re looking for a checking account, choose an account without monthly fees and a solid ATM network. For savings, prioritize your interest rate — you can easily find accounts that pay above 1.50% annual percentage yield these days.

Keep in mind that joint accounts offer double the federal insurance of individual ones — meaning you can keep up to $500,000 in them and still be covered in case of bank failure. But though most banks do offer joint accounts, some newer banks — including Chime and Varo — do not.

Opening a joint account is similar to opening an individual one: You’ll just need both partners’ personal information, often details such as your Social Security numbers, full legal names and addresses.

No matter how you manage your accounts, sharing a future involves shared money goals — and those require making time to talk. “In a healthy couple that has good communication, it can work really well to [combine finances] anyway,” Higgins says.

The article, Does Marriage Have to Mean Merging Money?originally appeared on nerdwallet.com

Coulee Bank Mortgage: Home Projects With the Highest Returns

HouseIf you’re spending time and money to renovate your house, choosing which projects are worth it should be a top priority. You want to recoup some of your costs, don’t you?

Many upgrades could improve a property’s aesthetics or make it a better fit for your family. But not all projects will increase your home’s value — and those choices might affect how much your home sells for later on.

If you’re looking for remodeling projects that will get you a return on your investment, you may want to focus on these:

Stone Veneer Exterior. This is the highest-ROI project you can take on. The average homeowner recoups nearly 96% of the total cost. Plus, it does wonders for your curb appeal.

Wooden Deck. Want a great way to get more use out of your yard? This is the perfect place to start. A wood deck could add over $10,000 to your resale value.

Metal Roofing. Replacing your shingled roof with metal may net you about 61% of your project cost back and add more than $24,000 to your home’s resale value. As a bonus, it could help lower your energy bill.

New Garage Door. Upgrade your standard old garage door for a nicer model, like a wood or paneled one. In return, you might get a whopping 94.5% of your costs back — and improve your curb appeal to boot.

Major Kitchen Remodel. Any amount of kitchen remodeling is good for your home’s value. But a major overhaul can add more than $40,000 to your future sales price.

Need help covering the costs of your next home improvement project? Get in touch to learn about refinancing, home equity loans and other options. Reach out to a Coulee Bank mortgage lender today for a personalized recommendation.
 

Coulee Security Tip: Protect Yourself With Stop. Think. Connect.

Internet Security





 








Basic advice to Stop: Make sure security measures are in place. Think: about the consequences of your online actions. Connect: and enjoy the internet.

  • Keep security software current: Having the latest security software, web browser and operating system is the best defense against viruses, malware and other online threats.
  • Protect all devices that connect to the internet: Along with computers, smartphones, gaming systems and other web-enabled devices also need protection from viruses and malware.
  • Plug & scan: USBs and other external devices can be infected by viruses and malware. Use your security software to scan them.
  • Protect your $$: When banking and shopping, check to be sure the sites is security enabled. Look for web addresses with “https://,” which means the site takes extra measures to help secure your information. “Http://” is not secure.
  • Back it up: Protect your valuable work, music, photos and other digital information by making electronic copies of your important files and storing them safely.
 
Coulee Security Tips are provided by Coulee Bank's IT Network Risk Manager, Quentin Fisher. He is always on the lookout for ways to keep our customers' information safe, here at the bank, at work and home.

Coulee Investment Center: Tax Strategies for Retirees 

 

Nothing in life is certain except death and taxes. -- Benjamin Franklin

That saying still rings true roughly 300 years after the former statesman coined it. Yet, by formulating a tax-efficient investment and distribution strategy, retirees may keep more of their hard-earned assets for themselves and their heirs. Here are a few suggestions for effective money management during your later years.

Less Taxing Investments
Municipal bonds, or "munis," have long been appreciated by retirees seeking a haven from taxes and stock market volatility. In general, the interest paid on municipal bonds is exempt from federal taxes and sometimes state and local taxes as well (see table).1 The higher your tax bracket, the more you may benefit from investing in munis.

Also, consider investing in tax-managed mutual funds. Managers of these funds pursue tax efficiency by employing a number of strategies. For instance, they might limit the number of times they trade investments within a fund or sell securities at a loss to offset portfolio gains. Equity index funds may also be more tax efficient than actively managed stock funds due to a potentially lower investment turnover rate.

It's also important to review which types of securities are held in taxable versus tax-deferred accounts. Why? Because the maximum federal tax rate on some dividend-producing investments and long-term capital gains is 20%.3 In light of this, many financial experts recommend keeping real estate investment trusts (REITs), high-yield bonds, and high-turnover stock mutual funds in tax-deferred accounts. Low-turnover stock funds, municipal bonds, and growth or value stocks may be more appropriate for taxable accounts.

The Tax-Exempt Advantage: When Less May Yield More
Would a tax-free bond be a better investment for you than a taxable bond? Compare the yields to see. For instance, if you were in the 25% federal tax bracket, a taxable bond would need to earn a yield of 6.67% to equal a 5% tax-exempt municipal bond yield.

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Which Securities to Tap First?
Another major decision facing retirees is when to liquidate various types of assets. The advantage of holding on to tax-deferred investments is that they compound on a before-tax basis and therefore have greater earning potential than their taxable counterparts.

On the other hand, you'll need to consider that qualified withdrawals from tax-deferred investments are taxed at ordinary federal income tax rates of up to 37%, while distributions -- in the form of capital gains or dividends -- from investments in taxable accounts are taxed at a maximum 20%.* (Capital gains on investments held for less than a year are taxed at regular income tax rates.)

For this reason, it's beneficial to hold securities in taxable accounts long enough to qualify for the favorable long-term rate. And, when choosing between tapping capital gains versus dividends, long-term capital gains are more attractive from an estate planning perspective because you get a step-up in basis on appreciated assets at death. It also makes sense to take a long view with regard to tapping tax-deferred accounts. Keep in mind, however, the deadline for taking annual required minimum distributions (RMDs).

The Ins and Outs of RMDs
The IRS mandates that you begin taking an annual RMD* from traditional individual retirement accounts (IRAs) and employer-sponsored retirement plans after you reach age 70½. The premise behind the RMD rule is simple -- the longer you are expected to live, the less the IRS requires you to withdraw (and pay taxes on) each year.

RMDs are now based on a uniform table, which takes into consideration the participant's and beneficiary's lifetimes, based on the participant's age. Failure to take the RMD can result in a tax penalty equal to 50% of the required amount. Tip: If you'll be pushed into a higher tax bracket at age 70½ due to the RMD rule, it may pay to begin taking withdrawals during your sixties.

Unlike traditional IRAs, Roth IRAs do not require you to begin taking distributions by age 70½.2 In fact, you're never required to take distributions from your Roth IRA, and qualified withdrawals are tax free.2 For this reason, you may wish to liquidate investments in a Roth IRA after you've exhausted other sources of income. Be aware, however, that your beneficiaries will be required to take RMDs after your death.

Estate Planning and Gifting
There are various ways to make the tax payments on your assets easier for heirs to handle. Careful selection of beneficiaries of your accounts is one example. If you do not name a beneficiary, your assets could end up in probate, and your beneficiaries could be taking distributions faster than they expected. In most cases, spousal beneficiaries are ideal because they have several options that aren't available to other beneficiaries, including the marital deduction for the federal estate tax.

Also, consider transferring assets into an irrevocable trust if you're close to the threshold for owing estate taxes. In 2019, the federal estate tax applies to all estate assets over $11.4 million. Assets in an irrevocable trust are passed on free of estate taxes, saving heirs thousands of dollars. Tip: If you plan on moving assets from tax-deferred accounts, do so before you reach age 70½, when RMDs must begin.

Finally, if you have a taxable estate, you can give up to $15,000 per individual ($30,000 per married couple) each year to anyone tax free. Also, consider making gifts to children over age 14, as dividends may be taxed -- or gains tapped -- at much lower tax rates than those that apply to adults. Tip: Some people choose to transfer appreciated securities to custodial accounts (UTMAs and UGMAs) to help save for a grandchild's higher education expenses.

Strategies for making the most of your money and reducing taxes are complex. Your best recourse? Plan ahead and consider meeting with a competent tax advisor, an estate attorney, and a financial professional to help you sort through your options.

Reach out to Shari Hopkins, LPL Financial Advisor, for a personalized recommendation.

Source/Disclaimer: *The RMD age changed to age 72 with the passage of the Secure Act unless you turned 70 ½ before Jan 1, 2020.
1Capital gains from municipal bonds are taxable, and interest income may be subject to the alternative minimum tax.
2Withdrawals prior to age 59½ are generally subject to a 10% additional tax.
3Income from investment assets may be subject to an additional 3.8% Medicare tax, applicable to single-filer taxpayers with modified adjusted gross income of over $200,000 and $250,000 for joint filers. 




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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (Member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Coulee Bank and/or Coulee Investment Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Coulee Investment Center, and may also be employees of Coulee Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Coulee Bank or Coulee Investment Center. Securities and insurance offered through LPL or its affiliates are: 


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