EPEFCU

Get a Headstart on Your Future

We’re sure you’ve heard the phrase “It’s never too early to start planning for retirement.” We all have, but how many of us have actually started saving? Our guess is that most people don’t start contributing to any type of retirement plans early on.

It’s our nature to procrastinate and regardless of the different types of investment vehicles available, none of them will do you any good if you don’t put any money into them.

So when should you start saving and where should you start? Ideally, you should begin saving for retirement as soon as possible. If you’re a recent college grad and you’ve just landed your fist job we’re pretty sure retirement is the last thing on your mind. But starting early can significantly affect the amount of money you accumulate by the time you're ready to retire. The sooner you begin, the more time your money has to grow.  

According to an article on CNN Money, someone who begins contributing $3,000 a year at the age of 25 for ten years, and then stops contributing all together will have accumulated more than $472,000 by the age of 65. On the other hand, someone who waits until the age of 35 to begin saving $3,000 a year for the next 30 years will have saved only $367,000. That’s a difference of $105,000!

Don’t panic if you haven’t already started. We understand that retirement planning can be a little overwhelming and we want to help. Here are some tips to get you started on the right track.

Step one, get started. Whether your in your 20’s, 30’s, or 40’s, it’s important to begin saving and keep saving for as long as you can. Start by contributing to your employer sponsored retirement plan and contribute the maximum needed for your employer to match your funds. Taking advantage of this free money is an easy way to get a jump start on you retirement goals.

Begin by setting realistic goals that will be easy for you to achieve. Remember that the earlier you start, the less you’ll have to save. According to the Charles Schwab website, you should be setting aside 10% per year if you’ve started saving in your 20’s. If you’ve started in your 30’s, you should be saving at least 12% to 15%, and if you’ve started saving while in your 40’s, you should be saving 30% to 35%.

Step two, work on aggressively paying down your debt. Commit yourself to becoming even more financially sound by being debt free, this way you’ll have more money to contribute towards your retirement goals.

Step three; don’t be afraid to be curious about your options. Explore your options, there are plenty of investment vehicles available, don’t be afraid to contribute to more than one. After all, the more you save, the better off you’ll be.  

Don’t be overwhelmed-there are numerous resources online that may help you decide. Also, it may be wise to sit down with a financial planner that can help you decide what the best options for you are. Whatever age you begin, the important thing is to stay the course. Even a small amount saved regularly can grow into a significant sum over time.

Are you saving for your future? When did you start and what advice can you give any of our readers? Don't be shy! We'd love to hear, and learn for you!

Summer Writing Contest Winners

Yesterday marked the first full day of fall which may bring joy to others who are ready for the cooler weather and sadness to those who are sad to see the warm weather and pool parties come to an end. At El Paso Employees FCU we celebrated Summer by kicking off our first ever Summer Writing Contest geared toward high school seniors and college students and we were excited to see so many students participate. Congratulations to our winners, Karina Canaba and Yasmeen Nicole Hernandez! Watch their video interview below!

    

 

Investing in Your Future- 401(k)

401(k) plans, named for the section of the tax code that governs them, arose during the 1980’s as a supplement to pensions, according to the Wall Street Journal. It is a retirement plan sponsored by an employer, and funded by the employee. The plan gives employees the opportunity to invest a portion of their earnings before taxes are deducted from their wages. The amount of money you are allowed to invest into your plan will vary depending on your employer; however, the federal government places a maximum on how much you can invest on an annual basis.

Your employer will determine when you are eligible to begin contributing should you choose to invest in a 401(k). Some employers allow new hires to begin contributing after only three months of employment, while others will make employees wait at least a year.

Often companies will match their employees’ contribution to their plan. In fact, nearly every plan offers matching funds—the most popular being 3% of your salary, according to the Profit Sharing/401k Council of America. With a 401(k), you determine how your money will be invested. There are various investment vehicles available, such as mutual funds, bonds, and other money market investments. It is important to understand the difference between your investment options before deciding where your money should go. If possible, sit down with a certified financial planner that can help decide the best route for you and your money.

If you’ve decided to invest in a 401(k), keep in mind that there are costly penalties associated with withdrawing funds before retirement. Although it is highly discouraged, you may borrow from your 401(k) prior to retirement through a loan or withdrawal. According to the Wall Street Journal, the loan is paid back into the 401(k) account with interest through after-tax salary deductions. If the participant terminates employment at the company, the loan must be paid back in full with interest immediately. Withdrawals are subject to a 10% penalty in addition to taxes that apply.

There are certain circumstances that will permit you to withdraw from your investment account without penalty, these include: termination of employment, death or disability, financial hardship, and if the account owner reaches the age of 59 ½, according to Businessweek.

There are two 401(k) plans to choose from. Your company most likely offers a traditional 401(k) and a Roth 401(k). The differences between the two are summarized in the chart below.

 

	Traditional 401(k)	Roth 401(k)
Tax Status of Contributions	Pretax contributions reduce current taxable income.	After-tax contributions do not affect current taxable income.
Tax Status of Distributions After Age 59 1/2	Taxed as current income.	Tax free and penalty free for investors who have had the account for at least five years.
Rollovers to IRAs	Must currently be rolled over first to a traditional IRA, then converted to a Roth IRA, which requires a tax payment.	May be rolled over directly to a Roth IRA with no tax payment.

Courtesy of Yahoo Finance

Each plan differs in the way in which participants can choose to pull their money after retirement. There are three options, the first is a lump-sum payment, the second is an installment payment, and the third is through annuities. Speak to a financial planner to determine which option is the best for you.

It’s important to understand how a 401(k) works and how it can help you invest in your future so that you’ll be ready for retirement when the time comes.

Have you chosen to invest in your future? How so? Tell us how you are making sure you’ll be ready for retirement when the time comes!

Smart Fall Buys

Itching to go on a shopping spree? Pick up these items for fall and save.

It’s hard not to splurge every once in a while, especially if you’ve recently buckled down and tried living on a budget. If you’ve been feeling withdrawal symptoms from your shopping spree days and are ready to take a break from your budget, get your fix while still shopping smart and pick up these fall items.

Start shopping for next year’s summer wardrobe. As the fall and winter months near, summer clothing is pushed to the back of the store and marked down as retail stores begin making room for the new fall lineup.

Planning on getting away this holiday season? Plan on purchasing your holiday airfare tickets during the September and October months as airlines typically begin to raise their prices after October, when people begin to purchase their tickets for the upcoming holidays. For the cheapest seats, avoid booking airfare for the busiest holiday travel days. For the Thanksgiving holiday, this means avoiding the Wednesday before and the Sunday after; for New Year’s, avoid returning between Jan. 2 and Jan. 4, says walletpop.com.

If you’ve been longing to trade in the clunker in your driveway for your dream car, now is the time. The end of the year marks the time when dealerships and automakers are trying to clear lots and make room for next years models. While you might not have as big a selection as you would in January, you can count on negotiating a good deal on the “older models.”

You probably aren’t thinking about lounging on your patio as the temperatures begin to drop, but this is certainly the best time of the year to purchase patio furniture. The prices are usually reduced as retail stores try to rid themselves of the remainder of the summer items and make way for the fall and winter ones.

While your busy preparing and shopping for the upcoming holiday season, don’t forget to take advantage of the great deals offered at the end of the year. Thinking ahead of time and shopping wisely will help you maintain a budget during the busiest shopping season of the year.

Were these suggestions helpful? What other great deals have you come across during the fall season? Tell us! We’d be honored to read and learn from your comments!

To Rent or To Buy?

Our current economic crisis has left an awful taste in home-buyers’ mouths. Once thought of as an important life stepping stone, home buying has become a risky endeavor that few are brave enough to undertake. Still, not all hope is lost. If you’ve been contemplating purchasing your own home, it’s important to weigh the advantages and disadvantages of home buying and renting before making your decision.  

First, we’ll take a look at some of the advantages renting has to offer. Renting is definitely less of a financial risk than buying. As a renter, your initial costs will be lower than those of a home buyer. When renting, you are typically required to leave an application fee, a pet deposit fee if you plan on moving your furry friends in with you, a security deposit, and the first moth’s rent. The application fee is usually non- refundable while 50% of the pet deposit fee is returned upon moving out and 100% of the deposit is returned given that there has been no damage to the apartment or home during the duration of the renters stay.  

If you decide to break your lease before your contract expires, you may still be held responsible for paying the rent for the months remaining on your term. Even so, renting offers you more mobility than does home buying. 

As a renter, your monthly bills may be less than as a home buyer. When renting an apartment, many complexes bundle your monthly rental payment with all or some utilities, and your monthly payment will not increase until your renewal date.

While renting has its advantages, it also has many disadvantages you should keep in mind. The ability to customize your home to suite your needs is not typically an option when renting.

Renting can also bring less security and privacy. While renting, you face the possibility of not having your lease renewed or of being evicted, and having your rent increased. Your landlord may also have the right to enter your home or apartment without notification whether you are present or not.  

On the other hand, buying a home brings different types of advantages. Here are some to consider. Owning your home will increase your net worth over time by improving your credit rating and may be tax deductible. As you continue to make your payment each month, you will build equity in your home, allowing you to use your home as security to borrow money against it in the future. Once you have finished paying off your home, you can enjoy living rent free. Your home may also increase in value becoming worth more than what you paid for it.

Owning your home brings with it a sense of security, and unlike renting, you have the freedom and independence to customize your home to your exact tastes. Forget sharing the community pool and having to abide by the posted hours, being a home owner will allow you to create your own backyard oasis that you and your family can enjoy at any hour.  

Still, becoming a homeowner has some disadvantages to consider. Your initial costs will probably be greater than those of a renter because you will most likely be required to cover the costs of a deposit, home inspection, appraisal, down payment, first mortgage payment, attorney’s fees, and title search and document preparation fees.

The monthly cost of buying may be significantly more than that of renting. If you’re a new home buyer it is important to develop a budget that your family can easily stick to each month to ensure that you’ll have money left over should you encounter any sudden financial emergencies. As a home buyer, you will not be able to call maintenance to fix any needed repairs. You will be responsible for fixing and covering the costs of any repairs you might encounter.

Buying your own home can also decrease your mobility. If you job or other life circumstance keeps you moving you might want to put buying house on hold.

Take caution when deciding on a price range, just because you qualify for a large loan amount doesn’t necessarily mean you should take it. Commit yourself to a monthly payment you know you’ll be able to afford no matter what happens. If your household currently depends on two incomes, create a plan of action in the event that one of you looses your job.

Making the choice to purchase a home is a long term decision that requires careful consideration and brings with it plenty of responsibility. When juggling the choice to rent or buy think carefully about the pros and cons of both before making your final decision.

Already a homeowner? Join us for our free Home Equity seminar to find out how a Home Equity loan could help you with your current financial situation.

Are you considering purchasing a home? What is on your pros/cons list? Share with us! We'd be honored to read your comments!

Try Our New Online Account Service!

We know you’re busy. Who has time to walk into a branch, sit for an hour and wait for a banker to open up an account for you? We know you most certainly don’t! These days we have so many things going on in our lives that we need ways to conduct our business fast and efficiently. El Paso Employees has been working hard to bring you online account and service opening. In 10 minutes or less you can open an El Paso Employees account from the ease of your laptop. No more waiting in line or wasting time. With online account and service opening, you’ll be able to open new accounts or services like CDs!
Interested in learning more? Visit our website!

Selling? Tips to get Your Home off the Market Faster

It’s no secret that the current housing market situation is not exactly at its best. According to the U.S Department of Commerce, purchases of new homes in July fell 12.4% from the previous month to an annual place of 276,000, the weakest since data began in 1963. Although homeowners may be encountering some difficulty selling their home, all hope is not lost. Improve your chances of selling your home by following these simple tips.

First and foremost, conduct a pre-sale inspection. Doing so will give your buyers the impression that you have nothing to hide and will set their minds at ease knowing that they won’t be dealing with any unwanted emergencies soon after purchasing your home. Don’t wait for a buyer to discover any defects while conducting their own inspection. This might result in a loss of sale or a buyer attempting to renegotiate the asking price because you failed to disclose any necessary repairs.

Do your research when pricing your home. In today’s market, the price of your home means everything. According to an article written by Stacey Johnson, homes may take years to sell, while foreclosures can sell as little as days or even hours. Find out what homes in your area are selling for and try to stay within that price range. Pricing your home at a significantly higher price than other homes for sell in your area could have a significant impact on the number of buyers interested in purchasing your home.

Landscape, landscape, landscape. We can’t stress this enough. If a buyer’s first impression of a home is a beautiful landscape, chances are they’ll be more willing to pay a visit to your open house. An untended yard can turn off buyers regardless of how attractive the interior is. Many people begin their search online, if your homes photo doesn’t impress buyers don’t expect them to come knocking on your doorstep for a tour.

Strive to make your home look like a model home. Remove any and all personal items that make the home feel like it’s yours. For example, take down any personal items such as family photos that might make it more difficult for buyers to envision their own family inside your home. Remove any clutter from the walls and rooms so that your home feels clean, open, and inviting. You want your buyers to love your home, but most of all you want them to fall in love with the experience of living in your home.

If you’ve already moved out and your home is empty, consider staging. Adding furniture to the spaces will help buyers envision themselves in your home and get a feel for what it could look like should they choose to purchase your home.  
   
Finally, before you invite any potential buyers, make certain to check off all the items on your to-do list. If you’ve been meaning to fix that leaky faucet or give your walls a fresh coat of paint but just haven’t had the time to do it, now is your chance. On top of fixing leaky faucets and squeaky hinges, break out your cleaning supplies and give you’re a home a complete once over. We’re talking taking a toothbrush to your tile’s grout. Buyers will be walking through rigorously inspecting your home, tile mildew and carpet stains might scream neglect and change their minds about purchasing.

Remember that just because home purchases are down doesn’t mean they’re non -existent. In today’s tremendously competitive market, it’s important to cater to your potential buyer as much as possible, follow these tips to increase the likelihood that you’ll make a quick sell.

Have you recently sold your home? What steps did you take to ensure that your home would be sold quickly? Are you currently selling your home? Tell us what you think about these tips! Were they helpful? We'd be honored to read your comments! 

TGIF: Thank God it’s free (and Friday!), 7 things you shouldn’t be paying for.

With September underway the holiday season is just around the corner, which means the Christmas shopping season will soon be in full swing. If you’ve neglected to notice that there are only three months left to start saving for the holidays, don’t panic. We’ve put together a list of items you should be getting for free. Stop paying and start saving, there’s still time!

Stop paying for your daily dose of news. Still paying for the newspaper? Save on subscription costs by opting for the online version, most of the time you’ll find the same content online as you will in print.

Sure FIJI water looks great, but it’s also costly, especially when you have an endless supply of water at home and while it might not technically be free why not take advantage of something you pay for on a monthly basis? If you don’t like the taste of tap water invest in a water filter and a reusable water bottle. According to cleanair.org, Americans throw away 2.5 million plastic bottles every hour. Stop adding to the statistics, you’ll feel better about yourself knowing that you’re saving money and the earth.

Love to read? We understand that for true literary enthusiasts, eReaders might never be able to replace the feel of a good book in your hands. We aren’t asking you to give up the real thing; we just want you to stop paying for it. Why pay upwards of $15 for a paperback at Barnes & Noble when you could get it for free? Head out to your local library and start checking out your favorite paperbacks free of charge.

Moving? Stop paying for packing supplies. Businesses like Wal-Mart throw out plenty of boxes on a weekly basis. Take a trip to a nearby retail store and ask them what day their shipments come in. Chances are they won’t mind unloading boxes on you; they would have been throwing them out anyway.  

Checks are costly and unnecessary when so many financial institutions offer free online bill pay. You can add anyone as a payee and never use paper checks again. Not signed up? El Paso Employees offers free bill pay with every checking account.

Looking to adopt a new pet? Shelters usually charge a small fee when adopting a pet; however, people are welcoming unexpected liters everyday and giving them away completely free. Try searching for unwanted pets on sites such as Craigslist.

We’ve mentioned this one before but it’s such a great find that we’ll tell you about it one more time, just in case you missed our previous blog post. Google’s free service works just like 411, only better because it’s absolutely free. If you’re in need of a number with no phone book in sight, dial 800-GOOG-411 (800-4664-411) and never pay for this service again.

Stop shelling out your hard earned dollar bills for these free items and you might just have a few extra dollars to throw into the Christmas fund. Learning to spend your money wisely and staying on track with your budget can take some practice. Start slow by following these simple tips and we’re certain that you’ll find new ways to trim down your expenses in no time.  

Was this list helpful for you? What other items can you add to the list? We'd be honored to read your comments!