Finance

FEBRUARY 25, 2016

Securing your future

It takes money to make money Is there such a thing as good debt?

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t's counterintuitive that in order to borrow money you should already be in debt.

By Chelle Cordero

Banks and lending institutions need to see the credit history of anyone asking to borrow money, the borrower's ability to repay (income), available collateral (to ensure reimbursement), the purpose of the loan and current debt. Although most people consider "debt" to be a four-letter word, there is such a thing as good debt. Any loans taken out for advancement, like education, or money-making ventures, are included in the category of good debt so long as payments are up to date with a history of on-time payments; anytime you fall behind in your payments, you are risking losing the label of "good" debt. When a lender examines your credit history and sees an educational loan that is on schedule or ahead of schedule, for example, it will be viewed more positively than a balance on a clothing department store charge or high-interest credit cards. Business loans for a steadily growing business will also be viewed in a nicer way than

a car loan or a loan for a wedding reception. Real estate loans for investment properties have built-in collateral for repayment of the loan (or equivalent value) as well as the potential to make money; these qualify as good debt. Financial organizations need to assess more than the borrower's repayment history. They will also measure the amount of already outstanding debt versus free income, the number of inquiries into credit by other lenders, and they will assess the guarantee that they will not suffer losses if the borrower does default. Having too many credit lines, even if nothing is owed, will be viewed as adverse credit. An inquiry into your credit history will show attempts to get loans or credit. If credit was denied, then it becomes a negative. Some existing lenders periodically examine a customer's credit rating when reviewing accounts; some employers check the rating before hiring; and some mortgage companies may prequalify a candidate before actively looking for a house; these are called "soft inquiries" and

High interest credit cards can be a negative on your credit history. rarely have any effect on the credit rating. Consumers can and should check their own credit rating every so often. Federal guidelines permit consumers a free credit report each year; call Annual Credit Report at 877-322-8228, or go to Annual-CreditReport.com. It is also recommended to check your rating if you have applied for and been denied a loan. Ask the lender to tell you which company they used to make their determination. The most common credit reporting agencies in the U.S. are Experian, Equifax and TransUnion. Consumers can contact these companies to get copies of their credit report to verify that there are no mistakes, check personal information (name and address) and find potential negative information (making sure disputes and paid-infull accounts are recorded accurately). There are also companies, some of

them free, that will contact all the credit reporting companies for one comprehensive report. Report any inaccuracies in writing with proof and ask for immediate correction. Your resulting credit score represents the assumed risk a lender takes in extending you credit. Most people need to borrow money to purchase a home, pay for college, or make otherwise large purchases. It's important to have a favorable credit history for bank loans, mortgage companies and potential employment. Young adults or people who are new to this country (credit histories do not transfer between countries) need to establish credit. Secured loans or credit cards showing low credit lines and ontime payments are among the easiest ways to build a credit history. And remember that if you fail to pay, good debt quickly goes bad. n

Find out more and start saving today!

Oceanside Main Branch 45 Atlantic Ave. Oceanside, NY 11572

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Understanding yoUr life insUrance needs Planning for every stage of your life

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or many, life insurance is a one-time purchase. But your policy should keep pace with your life circumstances.

Life insurance plays a key role in financial confidence and planning, according the Lincoln Financial Group’s recent M.O.O.D of America Survey (Measuring Optimism, Outlook and Direction), which found that 77 percent of policy holders feel prepared to protect their wealth compared to 61 percent of non-owners. Additionally, the survey found that life insurance owners feel more prepared for retirement, and potential income disruption. To ensure you have appropriate coverage, know your options, comparison shop and regularly review your policy to keep up with your income and needs as your life evolves. Young Newlyweds You may rely on two salaries to maintain your lifestyle. Would one person be able to continue living in the same manner on just one income? Are your savings adequate for your spouse to afford rent or mortgage payments and pay off debts without you? Premium rates are based on age and

health status, so the earlier you buy, the less you’ll potentially pay. Consider locking in lower rates now. Term life insurance is typically the most affordable option, providing coverage for a set number of years. Identify financial obligations and purchase a policy big enough to cover them. As your financial commitments increase, you can add more No matter your age, plan your legacy and have a clear idea of what to leave coverage as needed. Growing Families Between diapers, childcare, dance lessons, braces and education, raising a child in the United States can cost around $250,000 for a middle-income family, according to USDA estimates. Life insurance is crucial for allowing your family to maintain the lifestyle you’ve built for them, even if the unthinkable happens. The primary breadwinner should have a policy big enough to replace the income require to see children through to adulthood. But a non-working spouse might need coverage too. If that spouse was gone, there might be added household

behind for your loved ones.

expenses, such as childcare. Revisit your life insurance after the birth of every child. If coverage is lacking, consider a small policy alongside your existing one, which is generally more cost-effective than buying one larger policy. Retirement-Ready The kids are grown, the house is paid off, and you’re embarking on retirement. Do you still need life insurance? If no one is depending on you financially, it may be safe to scale down and maintain a smaller policy and focus on long-term care insur-

ance instead. But, you might also have good reasons to maintain status quo. For example, how big a hardship would it be for your spouse to lose your pension and Social Security benefits? Life insurance can help offset those losses and is useful in helping inheritors pay taxes on a large estate. Or if you have a cash value policy, perhaps you have plans to leverage it as a source of supplemental retirement income. Remember, life insurance doesn’t need to be static. It can be adjusted to fit your changing needs. n

Having More Retirement Accounts Is Not the Same As Having More Money When it comes to the number of retirement accounts you have, the saying “more is better” is not necessarily true. In fact, if you hold multiple accounts with various brokers, it can be difficult to keep track of your investments and to see if you’re properly diversified.* At the very least, multiple accounts usually mean multiple fees. Bringing your accounts to Edward Jones could help solve all that. Plus, one statement can make it easier to see if you’re moving toward your goals. *Diversification does not guarantee a profit or protect against loss.

To learn why consolidating your retirement accounts to Edward Jones makes sense, call your local financial advisor today. Marie L Taylor, AAMS®, CRPC®

www.edwardjones.com Member SIPC

Financial Advisor

365 Hempstead Avenue West Hempstead, NY 11552 516-538-4338

820581

IRT-1435C-A

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FINANCIAL MEMO

Beat those winter blues Save some green for summer

Financial memos are supplied by advertisers and are not written by the Herald editorial staff.

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There’s no other card like the Oceanside Christopher Visa® Credit Card. With no balance transfer fee and no application or annual fee – and a 6-month introductory rate starting as low as 1.99% APR** on purchases and balance transfers – transferring balances from a higher rate store or bank credit card could save you hundreds each month! (Plus, you can even personalize your card with a photo of family, pets or a great vacation shot.) Save money — and time, too. Along with great money-saving rates on our products, Oceanside Christopher offers you time saving conveniences, too, including free Online Banking with Bill Pay, Mobile Banking, Remote Check Deposit, as well as a nationwide network of free ATMs. So why not put these winter months to good use? Start saving more — and earning more — at Oceanside Christopher Federal Credit Union. nancing your auto loan could save you hun- your term and see if you qualify for a lower To find out more, go to www.TheCatholicmortgage rate. Whether it is a fixed or an CreditUnion.org, call 516-620-8100 or visit dreds of dollars over the life of the loan! Refinance your mortgage. Mortgage adjustable rate, our experienced profession- the branch nearest you. We’re conveniently rates are still low — and even lower at als can help you choose the product that is located at 45 Atlantic Avenue in Oceanside and Oceanside Christopher compared to other right for you – and your budget. at 4050 Merrick Road in Seaford. Don’t wait: financial institutions. Visit a branch to extend Cut your credit card bill down to size. Summer will be here before you know it! n O.K. WITH CORRECTIONS BY:_________________________________________

Wishing the cold days of winter would end already? Start saving for summer — and your long-term future — at Oceanside Christopher Federal Credit Union. A not-for-profit cooperative providing a full menu of financial services to Catholics in this community, Oceanside Christopher offers better rates on savings and loans and fewer fees than a bank — so you earn more and save more on virtually all your banking. Our products and services can help you and your budget: Plan and save for the future, whether you’re looking to fund a family getaway this summer or anticipating college costs down the road. Look to us to help you: Achieve your savings goals. In addition to a standard savings account, Oceanside Christopher has specialty savings accounts you can use to set aside some money for whatever your plan may be! Deposits and withdrawals can be made at any time with this specialty account. Refinance your auto loan. Do you have an auto loan from another financial institution? Let Oceanside Christopher see if we can beat your current rate and save you money each month! With rates starting as low as 1.49% APR for a five-year term, refi-

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Roth IRA: An IndIspensIble sAvIngs tool For your retirement … and beyond

If you’re somewhat familiar with investing, you may know that the Roth IRA is a great retirement-savings vehicle. But are you aware that some of its benefits can also pay off for the next generation of your family? To understand why this is so, it’s necessary to be familiar with a Roth IRA’s features. For starters, when you contribute to a Roth IRA, your earnings have the potential to grow tax free, provided you don’t start taking withdrawals until you’re 59½ and you’ve had your account at least five years. The amounts you contributed aren’t taxed when withdrawn because you’ve already paid taxes on the money you put in. And the potential for tax-free earnings can continue even when your beneficiaries inherit your Roth IRA, though you’ll need to consult with your tax advisor on this issue. A Roth IRA also offers other features that can help you build resources for retirement while possibly helping your surviving family members. For one thing, you can contribute to your Roth IRA for as long as you have some earned income, up to the contribution limits, and as long as you meet certain income limitations. Even if you’ve officially “retired,” you might do some consulting or part-time work. So you could put some of your earnings into your Roth IRA. This ability to keep

funding your Roth IRA virtually indefinitely can give you more flexibility in managing your retirement income — and, depending on how you do manage that income and what your other objectives may be, you may also end up with more money that could be left to your beneficiaries. Also, unlike a traditional IRA or a 401(k), a Roth IRA does not require you to start taking minimum distributions at age 70½. In fact, you are never required to withdraw money from your Roth IRA. And by leaving your account intact for as long as possible, you’ll potentially have more money available for a variety of options — one of which may involve leaving sums to your beneficiaries. Your non-spouse beneficiaries must take annual required minimum distributions, but they have the option to take the distributions over their lifetime. Keep in mind, though, that your Roth IRA is part of your estate for purposes of federal estate taxes. (Some states also have estate taxes that apply at amounts less than the federal amount.) In any case, if you have a sizable estate, you should consult with your tax and legal advisors. When you invest in a Roth IRA, your goal, first and foremost, is to help fund your retirement. In fact, basically all your decisions regarding your Roth IRA — how

The significant differences between the Roth and the traditional IRA hinge on when you pay taxes and how much goes to Uncle Sam. much to contribute, where to invest the you could help out the next generation, or money and when to begin taking with- two, of your family. n drawals — should be based on your own retirement goals. However, as a side benefit Courtesy of Steve Katz, Edward Jones & Co. to investing in a Roth IRA, you may find that

>MORE Retirement Stability ®

Retirement Planning · Traditional IRAs · Roth IRAs · Tax Advantage Programs1 · And so much >more®.

Plan. Save. Enjoy. Whether you’re nearing retirement or just starting out in the workplace, we’ll help tailor the right savings plan to build your retirement portfolio. We can also show you how to roll your accumulated pension funds into a secure-growth, FDIC-protected IRA. The savings in your IRA are now protected by the FDIC up to $250,000†.

Please speak with one of our Retirement Planning Experts for >more® information. Call (877) 786-6560 or visit us at myNYCB.com

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Find out how >more® choices and >more® guidance will help you create a retirement plan you can count on.

1 Contact your tax advisor for more details. FDIC-Insured IRAs held at one financial institution are aggregated and insured in the amount of up to $250,000 per participant.

Let Us Lead You on a Path of Financial Security and Inner Peace We Specialize In

Make saving a priority Take control of your money

Already abandon your New Year’s resolution? If your goal was to save money, it’s never too late to start. Did you know that about one-third of American adults don’t have any emergency savings? Financial experts typically recommend having emergency savings of at least three months’ pay; almost half of the adult population have less than that. According to results of a survey conducted last year by bankrate.com, saving is not a function of income, but one of discipline and living within your means. According to the personal financial website’s chief financial analyst, Greg McBride, “there are consumers from all walks of life that have figured out how to do it”. Want help figuring it out? An important rule — pay yourself first! Even if you can only save a small amount each month, make sure you do it. To make it easier, set up direct deposit where you work to have whatever amount you decide on go directly into a savings account (even if it’s only $10). Once you get started, you won’t even miss it and may want to consider adding any raises or income tax refunds you get to the amount you save. If you’re paying off a loan, contin-

ue making the payments to yourself once it’s paid off. Think it’s impossible to save even the smallest amount? Create a budget. Track your spending for a month. You may be surprised to see how money is being wasted. Do you really need that extra, extra large sized specialty drink every day? See how much you’ll save (in money and calories) if you give that up. Check the Internet for all kinds of information about budgeting and saving. If you already have a relationship with a financial institution, see what kind of assistance they offer. Many credit unions provide free budgeting tools and financial tips and resources on their websites. Locally, Nassau Financial Federal Credit Union recently introduced Lucky Savers, a save to win savings program, which is a 12-month certificate that may be opened with as little as $25 and added to throughout the term. With this unique product, you can save money, gain interest, and have a chance at great cash prizes. Remember, your personal finance is in your own hands; however, there are plenty of free resources to help. n

Michael A. Bernabeo Financial Advisor

www.michaelbernabeo.com Michael_Bernabeo@swfg.net 24 East Park Avenue Long Beach NY 11561 P 516-897-4544 F 516-908-7888

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Michael A. Bernabeo, Registered Representative and Financial Advisor of Park Avenue Securities, LLC (PAS).250 Crossways Park Drive Woodbury, NY 11797. Securities products and services are offered through PAS, a registered broker dealer and financial advisor. 1516.677.6200. Field Representative, The Guardian Life Insurance Company Of America, New York, NY (Guardian). PAS is a indirect wholly owned subsidiary of Guardian. Sound Wealth Financial Group is not an affiliate or subsidiary of PAS or Guardian. PAS is a member FINRA, SIPC. Submission #- 2016-17899 Expiration Date- 2/18

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