Rollovers: Should you consider them?

When evaluating whether to initiate a rollover always be sure to (1) ask about possible surrender charges that may be imposed by your employer plan, or new surrender charges that your IRA may impose, (2) compare investment fees and expenses charged by your IRA (and investment funds) with those charged by your employer plan (if any), and (3) understand any accumulated rights or guarantees that you may be giving up by transferring funds out of your employer plan.

A rollover is the movement of funds from one retirement savings vehicle to another. You may want to make a rollover for any number of reasons — your employment situation has changed, you want to switch investments, or you’ve received death benefits from your spouse’s retirement plan.

There are two possible ways that retirement funds can be rolled over — the indirect (60-day) rollover and the direct rollover (or trustee-to-trustee transfer).

The indirect, or 60-day, rollover

With this method, you actually receive a distribution from your retirement plan and then, to complete the transaction, you deposit the funds into the new retirement plan account or IRA. You can make a rollover at any age, but there are specific rules that must be followed. Most importantly, you must generally complete the rollover within 60 days of the date the funds are paid from the distributing plan.

If properly completed, rollovers aren’t subject to income tax. But if you fail to complete the rollover or miss the 60-day deadline, all or part of your distribution may be taxed, and subject to a 10% early distribution penalty (unless you’re age 59½ or another exception applies).

Further, if you receive a distribution from an employer retirement plan, your employer must withhold 20% of the payment for taxes. This means that if you want to roll over the entire distribution amount (and avoid taxes and possible penalties on the amount withheld), you’ll need to come up with that extra 20% from other funds. You’ll be able to recover the withheld amount when you file your tax return.

The direct rollover, or trustee-to-trustee transfer

The second type of rollover transaction occurs directly between the trustee or custodian of your old retirement plan, and the trustee or custodian of your new plan or IRA. You never actually receive the funds or have control of them, so a trustee-to-trustee transfer is not treated as a distribution. Direct rollovers avoid both the danger of missing the 60-day deadline and the 20% withholding problem.

If you stand to receive a distribution from your employer’s plan that’s eligible for rollover, your employer must give you the option of making a direct rollover to another employer plan or IRA.

A trustee-to-trustee transfer is generally the most efficient way to move retirement funds. Taking a distribution yourself and rolling it over may make sense only if you need to use the funds temporarily, and are certain you can roll over the full amount within 60 days.

Should you consider a rollover?

In general, if your vested balance is more than $5,000, you can keep your money in an employer’s plan at least until you reach the plan’s normal retirement age (typically age 65). But if you terminate employment before then, should you consider a rollover to either an IRA or a new employer’s plan? There are pros and cons to each move.

IRA: In contrast to an employer plan, where investment options are typically limited to those selected by the employer, the universe of IRA investments is almost unlimited. Similarly, the distribution options in an IRA (especially for your beneficiary following your death) may be more flexible than the options available in your employer’s plan.

New employer’s plan: On the other hand, employer-sponsored plans may offer better creditor protection. In general, federal law protects IRA assets up to $1,283,025 (scheduled to increase on April 1, 2019) — plus any amount rolled over from a qualified employer plan or 403(b) plan — if bankruptcy is declared.* (The laws in your state may provide additional protection.) In contrast, assets in a qualified employer plan or 403(b) plan generally receive unlimited protection from creditors under federal law, regardless of whether bankruptcy is declared.

*SEP and SIMPLE IRAs are not included in or subject to this limit and are fully protected under federal law if you declare bankruptcy.


Use this rollover guide to help you decide where you can move your retirement dollars. A financial professional can also help you navigate the rollover waters. Keep in mind that employer plans are not legally required to accept rollovers. Review your plan document.

Some distributions can’t be rolled over, including:

  • Required minimum distributions (to be taken after you reach age 70½ or, in some cases, after you retire)
  • Certain annuity or installment payments
  • Hardship withdrawals
  • Corrective distributions of excess contributions and deferrals

1 Required distributions and nonspousal death benefits can’t be rolled over.
2 In general, you can make only one tax-free, 60-day, rollover from one IRA to another IRA in any 12-month period no matter how many IRAs (traditional, Roth, SEP, and SIMPLE) you own. This does not apply to direct (trustee-to-trustee) transfers, or Roth IRA conversions.
3 Taxable conversion
4 Nontaxable conversion
5 Only after employee has participated in SIMPLE IRA plan for two years.
6 Required distributions, certain periodic payments, hardship distributions, corrective distributions, and certain other payments cannot be rolled over; nonspousal death benefits can be rolled over only to an inherited IRA, and only in a direct rollover.
7 May result in loss of qualified plan lump-sum averaging and capital gain treatment.
8 Direct (trustee-to-trustee) rollover only; receiving plan must separately account for the after-tax contributions and earnings.
9 457(b) plan must separately account for rollover — 10% penalty on payout may apply.
10 Nontaxable dollars may be transferred only in a direct (trustee-to-trustee) rollover.
11 Taxable dollars included in income in the year rolled over.
12 401(k), 403(b), and 457(b) plans can also allow participants to directly transfer non-Roth funds to a Roth account if certain requirements are met (taxable conversion).


Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CFS”) a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS for investment services. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions holding company. Atria is not a registered broker-dealer and/or Registered Investment Advisor and does not provide investment advice. Investment advice is only provided through Atria’s subsidiaries. CUSO Financial Services, LP is a subsidiary of Atria..

Equifax Breach Relief Announcement Of $125 May Include Free Phishing

As a refresher, in 2017 there was a really, really big data breach involving the credit bureau, Equifax. It affected nearly half the population in the U.S. and caused many of those people a lot of grief trying to repair damage done by the leaked access to their social security numbers, dates of birth, addresses, credit histories, and basically any information needed to steal an identity. Well, in an effort to make that sting a little less painful, the government recently ordered Equifax to pay out about $700 million to those who were victims. It is easy to get a share of that, but it also leaves open many opportunities for phishing.

To be clear, you can potentially get other benefits instead of the $125 being advertised. They also have an option for partial credit monitoring reimbursement, if you used Equifax, reimbursement for costs related to dealing with the effects of the breach, monetary loss, and free credit monitoring.

If you were included in the long list of victims for this breach, be on the lookout for phishing email messages that will undoubtedly hit soon. They will likely mention Equifax, have a message related to the breach and/or the government action and probably will include a link or attachment. Just be sure that if you do receive anything in your email related to this that you take a few moments to review it carefully before clicking away. Watch for the telltale signs of phishing:

-The sender is not familiar-looking at all. Pay attention to the entire address.

-There are typos or the use of the language isn’t correct.
If you hover the mouse pointer over a link that is included, it doesn’t go where you would expect it to go.

-The messaging makes you feel as if you need to make a very quick, urgent choice to click something.

-The website any link takes you to isn’t secure (preceded by “https:”).

-And if you’re not one of the victims in this breach, but you get an email, definitely don’t click anything. Just delete the message. You can also get more information and find out if you were a victim by visiting the Equifax website or the FTC’s website.

To claim your resolution, just go directly to the website, If any link in your email doesn’t have that website in it, directly following by “.com,” don’t click it.

There is a “catch.” You can’t just get the $125, even if you were a victim. You have to accept the free credit monitoring first. If you already have credit monitoring in place, you may be eligible for the reimbursement, but may also have to prove you have it and will have it for six months. If you claim monetary reimbursement for dealing with it, be prepared to show proof before getting anything paid to you. The deadline to file is January 22, 2020. No payments will be issued before January 23 of 2020 either. That’s because they have to be authorized by a court, which will not be before that date.

Stickley on Security
Published July 30, 2019

The Newest Royal Baby Creates A Viral Scam

Any big event, from local to international interest, creates opportunities hackers can’t pass up. It has happened with World Cup and the Olympics, and even after the death of celebrities. Sadly, even the birth of a baby isn’t safe from internet scams. The arrival of Baby Archie of Sussex, born to the Royal Family, has prompted countless scams as the world clamors to know more about him. Facebook users have felt the burn of recent hustles that take advantage of the buzz surrounding the Royal Family’s newest edition. It’s a bleak reminder that online scammers will use any ruse, no matter how low it goes, to swindle unsuspecting users.

In the case of Baby Archie, a Facebook bait and switch campaign is currently a royal success. The buzz around the baby is at the heart of a Facebook “bait and switch” campaign. It relies on a fake link to a very fake website promising exclusive footage of the newborn. Once a Facebook user clicks on the link (the bait), they receive a message saying their video player needs updating to proceed. Once the user moves forward with the “updated” video download (the switch), a data-stealing virus starts compromising the system, scanning your device for personal information including bank account and credit card numbers–and of course, your contacts. From there, the scammer posts similar promises about Royal Baby footage to your friends and other Facebook contacts, creating a viral web of potential victims.

Unfortunately, we know the Royal Baby isn’t the only source for online scams and hacks. Anything newsworthy can be used to target those who want to know more or help with a crisis of any kind. Online fund raising efforts are fraught with scammers pretending to be a legitimate source for donations. Financial gifts that help with natural disasters and other events where the public wants to help are a particularly ripe target for scams. As with any newsworthy buzz, there are inevitably those looking to benefit from it.

When a social media friend shares a newsy link, message the friend and ask for more details. If there’s no response, assume a hacker was on the receiving end of your request and your friend’s account is compromised. Don’t hesitate to tell friends directly about your suspicion, as it’s likely other contacts have been hijacked as well. If you have the slightest inkling a social media post is questionable, report it to the platform provider, as they will investigate it further. Remembering to keep your social media scam-antenna set on high at all times.

Stickley on Security
Published July 28, 2019

Capital One Experiences A Capital Sized Data Breach

It’s all over the news this week. There was another data breach and if the numbers being reported are correct, it’s likely going to turn out to be one of the largest ones of this year. A very unsavvy “hacker” has been taken into custody for illegally obtaining data of over 106 million Capital One credit requestors in the United States and Canada. The data included some Social Security Numbers (SSN), self-reported income, names, addresses, birthdates, social insurance numbers for Canadians and any other information that would typically be found on a credit application.

The suspect bragged about taking the data in an online chat room. Someone saw it and alerted Capital One, who looked into it and subsequently found it to be true. Supposedly, she used to work for the Cloud Services provider that Capital One used to store the data and knew how it was stored. She acquired the data via a flaw in a firewall, or perhaps a misconfiguration. Information about the details will no doubt continue to pour in over the coming weeks and perhaps months.

Capital One stated that 99% of those affected did not have SSNs stolen and spokespersons have said they don’t believe it has been used for fraud; though some of it was reportedly posted on the hosting service, GitHub.

Those who applied for credit with Capital One between 2005 and early 2019 should consider freezing credit. This means that no one, including you, will have access to credit information. And what does that mean? It means no one can be given credit in your name. It also means you won’t be able to apply for credit of any kind or even perhaps apply to rent housing without unfreezing it.

Fortunately, as of writing all three of the major credit bureaus (one of which will likely be used if anyone tries to apply for credit) have put the option to freeze credit on the front pages of their websites. TransUnion and Equifax have put a link right at the top. Experian has one toward the bottom, but it’s still on the front page. You also have to visit each one individually to freeze your credit. It’s easy to unfreeze it, even temporarily. More good news is that it’s free to either freeze or unfreeze it now.

Of course, with any breach of this magnitude, there is likely to be some phishing. So be cautious when clicking links or attachments in email that may refer to this. If you don’t know the sender, are not expecting an attachment or link, or have any suspicion at all that it might be phishing, don’t click it. As always, if you are ever encouraged in email to check or modify account details, go directly to your account profile to do this using a previously bookmarked and trusted link. Don’t click or reply to email messages.

Stickley on Security
Published July 31, 2019

Keeping Your Bank Account And Credit Cyber-Smart

Financial institutions and hacking go hand-in-hand these days and keeping your bank account and credit from being the next victim is more important than ever. The safest approach, although the least favorite, is assuming that if your data hasn’t yet been hacked that at some point it will be. Hacking banks and their account holders is the most direct cash infusion a hacker can get…and they know it. According to Kaspersky Lab, attacks on ATMs alone hit an all-time high in 2017 with malware-as-a-service (MAAS) opportunities. With this service, even hacking “hacks” who have no cybercrime experience can watch an instructional “how to” video on how to target an ATM successfully. With all the relentless email phishing attacks and step-by-step advice on hacking, guarding our finances with common sense protection is something we all need to do. It all starts by being proactive with your accounts.

– Password security. It’s time to put passion into passwords! Assuming your account will at some point be breached, there’s no reason to make it easier for hackers to break your passwords. Every account deserves a unique password that is eight characters or longer and is a combination of numbers, upper and lowercase letters, and symbols. Try to create a sequence with meaning to make it easier to remember, though not easy to guess or dictionary words. If necessary, write the passwords down. Remember not to leave your written passwords somewhere they are easily found by others.

– Always use two-factor authentication (2FA) or as also referred to, multi-factor authentication (MFA). In the wake of massive financial hacking, most banks and social media provide 2FA as a second security step and can be easily set-up with accounts. When logging into an account, the bank sends a security code to your phone. To complete the login process, the code is needed as the second verification. It’s a great and easily added security layer, with the idea being that even if a hacker cracks your password, unless they have your phone, they’ll never get the 2FA needed to login.

– Check your accounts often. No more waiting for your monthly statements. With easy online access, keeping tabs on the financial comings-and-goings is an easy way to spot suspicious transactions. Should anything look questionable, it’s much more effective to alert your bank or provider immediately. Taking fast, proactive steps can prevent further damage to your account should it be breached.

– Of course, always be on the lookout for phishing scams. These are still common and frequent and are getting more difficult to detect all the time. If you are not expecting a link or attachment, regardless of the sender, just don’t click it.

– When using ATMS, take a quick look to ensure there isn’t a skimming device attached to it. If there is, don’t use it and report it to the financial institution. Also, make sure you use ATMs in well-lit areas and where there is plenty of traffic. Hidden ones or those in dark areas are easier targets for ATM scammers.

– Keep tabs on your credit reports. The big three credit bureaus–TransUnion, Equifax, and Experian allow a free credit report annually, so take advantage of getting one free every four months. Doing so allows you to see what’s going on in the background with your credit, and quickly report any nefarious credit-oriented movement.

– Finally, don’t be afraid to freeze your credit. By law, the big three credit bureaus now must offer free credit freezing and un-freezing. Should you spot something suspicious with your credit, a quick freeze can prevent a whole lot of financial heartache by keeping hackers from doing further damage. Just remember that frozen credit prevents access to your reports for anyone, including you.

Stickley on Security
Published August 1, 2019

Your Study Guide to Paying off Student Loans

It is not unusual for college tuition to cost $30,000 or more a year. Some students are able to pay for it with savings or get grants or scholarships. However, many have to turn to student loans to finance at least some or all of their costs. Taking out student loans can pay off in the long run because having a college degree usually makes it easier to get well-paying jobs. However, if you borrowed a hefty chunk of change, repaying your loans may seem like a daunting task. Student loans payments can rival those of a mortgage, and most graduates aren’t bringing in $300,000 a year at their first job. However, there is no need to change your name and flee the country; it is completely possible to repay your student loans and avoid default, even if you are facing economic hardship.

What types of student loans do you have?

Knowing what types of student loans you have is very helpful, as it can affect repayment options. One important distinction is whether the loan is public (meaning the government is either the lender or guarantor of the funds) or private. There are three major federal student loan programs: the Direct Loan Program, Federal Family Education Loan (FFEL) Program, and Perkins Loan Program (The authority for schools to make new Perkins Loans ended on 9/30/17, and final disbursements were permitted through 6/30/18. As a result, students can no longer receive new Perkins Loans). The Direct Loan and FFEL Programs both offer Stafford and PLUS loans.

The Stafford loan is the most common type of student loan and can be either subsidized or unsubsidized. If your loan is subsidized, the government pays your interest while you are in school or a period of deferment. If your loan is unsubsidized, you are responsible for the interest as soon as the funds are disbursed – while you are in school or deferment, you can choose to either pay the interest as it accrues or have it added to the loan balance (capitalized). PLUS loans are made to parents and graduate students and are always unsubsidized. Perkins loans are always subsidized.

Private loans are made by lenders with no government involvement. They are generally not subsidized. While federal student loan holders have many options available to them under the law, such as alternative repayment plans and deferment (discussed more below), private lenders are not required to offer these options.

What if you do not remember what types of loans you have? Look for your loan documents – you or your parents should have them somewhere. Also, you can call your lenders and ask. You can access information about federal student loans from the National Student Loan Data System (contact information is on located at the conclusion of this article).

When do you have to start paying your student loans?

In general, you do not have to repay your student loans while you are in school (as long as you are enrolled at least half-time). For Stafford loans, your first payment is normally due six months after graduating. For Perkins loans, you are given nine months. For PLUS loans, the borrower is given the option of starting repayment either within 60 days after the funds are disbursed or waiting until six months after the student has graduated or dropped beneath half-time enrollment. (The grace period is only 45 days after leaving school for graduate students.) If you have private student loans, you should talk to your lender about when you have to start repaying them.

Who should you pay?

Student loans, like mortgages, are often sold by the loan originator on the secondary market. To further confuse matters, lenders sometimes hire a servicer – a third party who collects the payments. If you fell behind with your payments, it is possible that your loan was sent to a collection agency or, for federal student loans, your state’s guarantee agency or the Department of Education. Whenever a loan is sold or payment collection duties are transferred, you should be notified. If you are not sure who to pay, check your mail to see if you received a notice. You can also check your credit report or call the original lender. As discussed above, if you have federal student loans, you can find out where they are by checking the National Student Loan Data System (although be aware that information may only be updated periodically).

Repayment plans

For Direct and FFEL loans, there are several repayment options available:

– Standard repayment plan This is the default plan borrowers are put on when you start making payments. You pay a fixed monthly amount for ten years (or less if the amount you borrowed was small). The monthly payment is the highest under this plan.

– Graduated repayment plan Payments can start out as low as half of what the standard plan offers (but never below the interest amount) and are typically increased every two years. If you owe enough, you can combine this plan with the extended repayment plan. Otherwise, the loan must still be paid off in 10 years (for loans that entered repayment on or after July 1, 2006), meaning that the later payments will be higher than under the standard plan. This plan may be appropriate for you if your income is low now, but you expect it to increase significantly in the future.

– Extended repayment plan This plan allows you to stretch the length of your repayment period to up to 25 years, which lowers your payment. You must owe at least $30,000 to use this plan.

– Income-contingent repayment plan (for Direct loans only, excluding parent PLUS loans) Income and family size are taken into consideration when determining your monthly payment for this plan. For those with limited income, the monthly payment can be very low, even less than the interest charges. The repayment period can last longer than 10 years, and any loan balance remaining after 25 years of payment is canceled.

– Income-sensitive repayment plan (for FFEL loans only) Like with the income-contingent repayment plan, your monthly payment is based on your income. However, the payment must cover at least the interest, and the repayment period is limited to ten years, so later payments will be higher.

– Income-based repayment plan (not available for parent PLUS loans) In order to qualify, you must have a certain level of student loan debt relative to your income and family size. Borrowers may be able to get a lower payment with the income-based repayment plan than the income-contingent or income-sensitive repayment plan. The monthly payment amount can be less than the interest charges, and any loan balance remaining after 25 years is canceled (10 years for Direct loans if you have a public service job). For FFEL loans, you have a right to switch your repayment plan once a year (lenders can allow more frequent switching at their discretion). For Direct Loans, you can switch plans as often as you want. For FFEL and Direct loans, the standard repayment period for Perkins loans is 10 years or less. Alternative repayment plans are not available, but schools can extend the repayment period for low-income borrowers and those facing prolonged illness or unemployment. Alternative repayment plans may also not be offered for private loans, but if you are struggling, you can talk to your lender about the possibility of restructuring your loan.


Consolidation is the combining of existing loans into one new loan. You can consolidate all, some, or just one of your student loans. (However, in general, you cannot consolidate a consolidation loan by itself.) You may be able to get a lower payment by consolidating your loans. You do not have to be current with payments to consolidate – in fact, many delinquent borrowers use consolidation to get back on track. You cannot combine your private loans with your federal loans into a federal consolidation loan. You can consolidate your federal loans and private loans with a private consolidation loan, but this is not recommended, as you lose the rights granted to federal loans, such as deferment and alternative repayment plans.

Monthly Payment & Interest

The chart below illustrates the monthly payments and interest charges under each repayment plan for a Direct Stafford loan, based on a loan amount of $50,000, interest rate of 6.8%, and borrower with an adjusted gross income of $35,000 and family size of 1. (These numbers are estimates only. Actual payments may vary. For the income-contingent and income-based repayment plans, it is assumed that there is an annual 3% increase in income and the poverty line.)


The circumstances in which a federal student loan may be canceled in full include the death or permanent disability of the borrower or attendance at a school where you were either falsely certified or the school closed before you could complete the program (and you don’t complete a comparable program at another school). Some federal loans are eligible for full or partial forgiveness if you are a member in a uniformed service, teach or provide services to needy populations, work in a health care profession or law enforcement, or participate in a government volunteer program. Check with your school, lender, or employer for details about cancellation.

Student loans are extremely difficult to discharge in a Chapter 7 bankruptcy. You must prove that repayment would cause you undue hardship. You may include student loans in a Chapter 13 repayment plan. They must be repaid in full, but collections actions, such as wage garnishment, cease the moment you file.

If you can’t pay

If you find yourself unable to pay your federal student loans, you may be able to get relief with a deferment or forbearance. A deferment is a temporary suspension of payments. If your loans are subsidized, the interest will be suspended; if not, interest will continue to accrue. Deferments are only permitted under certain circumstances, including enrollment as at least a half-time student, temporary total disability, enrollment in a graduate fellowship program, unemployment or other economic hardship, active duty in the armed forces, or participation in a rehabilitation program for the disabled. Forbearance is similar to deferment, only interest continues to accrue regardless of whether your loans are subsidized. (Forbearance can also involve a temporary acceptance of smaller payments.) Forbearances are granted for such reasons as a high monthly payment relative to your income, medical hardship or other unforeseen problems. If you have subsidized loans, obviously a deferment is preferable, but a forbearance is generally easier to obtain. Some private lenders may offer forbearances, but they are not required to do so.

A loan is considered in default if you don’t arrange a deferment or forbearance and are more than 270 days past due. The consequences of default are severe and can include aggressive collection tactics, tax refund interception, lawsuits, and non-judicial garnishment of up to 15% of your net wages. You will also be ineligible for deferments, alternative repayment plans, grants, and new student loans. Collection fees, which can be significant, will be added to your balance. Additionally, a default notation will appear on your credit report, and since there is no statute of limitations on student loans, the negative impact may follow you indefinitely if you continue to not pay. For federal student loans, you have a one-time right to get out of default with a “reasonable and affordable payment plan”. If they want you to pay an amount you feel you cannot afford, be persistent in pushing for an amount that you are comfortable with – it may be helpful to send them a copy of your spending plan. Once you make nine on-time payments (for Direct and FFEL loans you are permitted to miss one payment; for Perkin loans you are not) your loan is rehabilitated, i.e., taken out of default.


National Student Loan Data System
Allows you to look up information about your loans

Federal Student Aid Office
Gives information on loan repayment, forgiveness, deferral
and forbearance.

National Consumer Law Center’s Student Loan
Borrower Assistance Project
Lays out repayment options for borrowers.