Sharing Money Problems with Kids


Kids are surprisingly resilient in the face of a crisis. But even so, serious family money troubles can potentially affect a young person’s home life, education and outlook on money management down the road.

Children under the age of 10 who are particularly mature – and particularly observant – often can immediately pick up on a parent’s stress over money or other issues.

How can you be honest about your finances with a child under the age of 18 without spreading confusion or stress? The American Psychological Association points out ( that kids can often deal with a crisis fairly well but most aren’t yet keenly aware of tension in the household. When sharing money problems with your kids, here are a few ideas from the APA and other resources you can use:

  • Tell the truth, but watch how you tell it. You want to spare your child from hardship and worry, but it’s important not to say things are great when they’re clearly not. Try to explain in brief but truthful detail about what’s happening and leave time for questions. Any child, no matter how sophisticated, can become worried if his or her parents reveal extreme fear about money concerns. Keep in mind there’s a great opportunity in these conversations to understand your child’s thoughts and attitudes. Make it a kind, understanding conversation, and listen for clues.
  • Keep the discussion age-appropriate. Teens may be more aware of general financial circumstances because they can spot different behavior at home or because their friends’ parents might be going through similar circumstances. However, younger kids generally have less knowledge and experience to process what’s going on. Tell kids what they need to know, but don’t overload them with information.
  • Set an example. It may be difficult, but demonstrate grace under pressure. Be calm and reasoned. If you are looking for work, discuss that with your children and even share what that process is like. Remember, kids learn by example. If they see their parents dealing sensibly with adversity no matter how long it takes to right the ship, that’s a very important lesson. Communicate behaviors that they will need to learn if they’re going to successfully deal with money problems as adults.
  • Introduce or reinforce money lessons. Whatever the problem, reinforce smart spending and savings behavior no matter what the child’s age. However old they are, ( kids should get regular lessons in the relationship between money and the things in their life.
  • Make it educational. Communicate behaviors that kids will need to successfully manage money in the future. Whatever the problem, reinforce smart spending and saving behavior no matter what the child’s age. Teaching kids about money can be fun by introducing educational games. The Practical Money Skills website offers a collection of games ( kids can play to learn how to save money. Talk to them about important financial concepts such as budgeting – and bring them to life using real-life examples like planning an affordable family vacation or outing.
  • Introduce the emergency fund. One of the essential building blocks of personal finance, the emergency fund exists to protect savings and keep borrowing to a minimum. Older children might embrace the value of an emergency fund as a way to offset the financial loss of a lost bike or smartphone or some other personal item. For adults, the general rule of thumb on emergency funds is to have at least three to six months of savings on hand in case of a lost job or expensive repair. The key is to talk with the teen about the parallel financial risks in their lives that might benefit from the existence of emergency savings.
  • Focus on things more important than… things. Parents can use a tough financial stretch to focus on the positive, such as time spent enjoying family, friends and pets, which doesn’t cost much at all. Good health and healthy behaviors are essential elements of correcting problems, overcoming tough times and living a full life. In short, use this moment in time to help your child put money in the proper perspective.

Bottom line: A money crisis can truly test the strength of a family. Should you find yourself in a financial bind, use it to teach your kids some very important money lessons.

By Nathaniel Sillin


Skewed Cupid


Valentine’s Day conjures up images of hearts, flowers and a double-decker box of chocolate, nougat and nuts. But, metaphorically speaking, what happens when that stupendous bouquet of roses you got turns out to be a pile of weeds?

Love might cloud our vision, but that doesn’t mean you have to turn a blind eye to consumer pitfalls. If you know what to look for, you can avoid some big missteps. While these are probably the least romantic Valentine sentiments ever, they just might save you some heartbreak down the road.

Can we talk? Experts suggest engaged couples have a frank and free-ranging discussion about money before tying the knot. Can you establish joint priorities and a budget? If one or both of you are carrying a lot of debt into the marriage, do you have a plan to deal with it? Who will manage paying the bills? Before saying yes to the dress, should you say nyet to the debt? Bottom line: to live in “har-money,” talk to each other, early and often.

My not-so-funny Vile-entine. Online dating has brought millions together. But some scammers create fake profiles to trick you into sending money in the name of love. Is there an online love interest who asks you for money – or personal financial information? Swipe left – it’s almost certainly a scam artist. Don’t let an imposter pester you.

Hey baby, what’s your sign? What do you do if your special friend – online or in person, or even a buddy or relative – asks you to co-sign a loan? That means you’re promising to pay the debt if they don’t. There may be times you want to co-sign for someone but before you do, think about it long and hard. Remember, it’s an obligation that can affect your finances, too.

by Carol Kando-Pineda
Attorney, FTC’s Division of Consumer & Business Education

The Benefits of Tax-Advantaged Savings Vehicles

Source: Broadridge Advisor Solutions


Taxes can take a big bite out of your total investment returns, so it’s helpful to look for tax-advantaged strategies when building a portfolio. But keep in mind that investment decisions shouldn’t be driven solely by tax considerations; other factors to consider include the potential risk, the expected rate of return, and the quality of the investment.

Tax-deferred and tax-free investments

Tax deferral is the process of delaying (but not necessarily eliminating) until a future year the payment of income taxes on income you earn in the current year. For example, the money you put into your traditional 401(k) retirement account isn’t taxed until you withdraw it, which might be 30 or 40 years down the road!

Tax deferral can be beneficial because:
• The money you would have spent on taxes remains invested
• You may be in a lower tax bracket when you make withdrawals from your accounts (for example, when you’re retired)
• You can accumulate more dollars in your accounts due to compounding

Compounding means that your earnings become part of your underlying investment, and they in turn earn interest. In the early years of an investment, the benefit of compounding may not be that significant.

But as the years go by, the long-term boost to your total return can be dramatic.

Taxes make a big difference

Let’s assume two people have $5,000 to invest every year for a period of 30 years. One person invests in a tax-free account like a Roth 401(k) that earns 6% per year, and the other person invests in a taxable account that also earns 6% each year. Assuming a tax rate of 28%, in 30 years the tax-free account will be worth $395,291, while the taxable account will be worth $295,896. That’s a difference of $99,395.

This hypothetical example is for illustrative purposes only, and its results are not representative of any specific investment or mix of investments. Actual results will vary. The taxable account balance assumes that earnings are taxed as ordinary income and does not reflect possible lower maximum tax rates on capital gains and dividends, as well as the tax treatment of investment losses, which would make the taxable investment return more favorable, thereby reducing the difference in performance between the accounts shown. Investment fees and expenses have not been deducted. If they had been, the results would have been lower. You should consider your personal investment horizon and income tax brackets, both current and anticipated, when making an investment decision as these may further impact the results of the comparison. This illustration assumes a fixed annual rate of return; the rate of return on your actual investment portfolio will be different, and will vary over time, according to actual market performance. This is particularly true for long-term investments. It is important to note that investments offering the potential for higher rates of return also involve a higher degree of risk to principal.

Tax-advantaged savings vehicles for retirement

One of the best ways to accumulate funds for retirement or any other investment objective is to use tax-advantaged (i.e., tax-deferred or tax-free) savings vehicles when appropriate.

Traditional IRAs — Anyone under age 70½ who earns income or is married to someone with earned income can contribute to an IRA. Depending upon your income and whether you’re covered by an employer-sponsored retirement plan, you may or may not be able to deduct your contributions to a traditional IRA, but your contributions always grow tax deferred. However, you’ll owe income taxes when you make a withdrawal.* You can contribute up to $5,500 (for 2015 and 2016) to an IRA, and individuals age 50 and older can contribute an additional $1,000 (for 2015 and 2016).

Roth IRAs — Roth IRAs are open only to individuals with incomes below certain limits. Your contributions are made with after-tax dollars but will grow tax deferred, and qualified distributions will be tax free when you withdraw them. The amount you can contribute is the same as for traditional IRAs. Total combined contributions to Roth and traditional IRAs can’t exceed $5,500 (for 2015 and 2016) for individuals under age 50.

SIMPLE IRAs and SIMPLE 401(k)s — These plans are generally associated with small businesses. As with traditional IRAs, your contributions grow tax deferred, but you’ll owe income taxes when you make a withdrawal.* You can contribute up to $12,500 (for 2015 and 2016) to one of these plans; individuals age 50 and older can contribute an additional $3,000 (for 2015 and 2016). (SIMPLE 401(k) plans can also allow Roth contributions.)

• Employer-sponsored plans (401(k)s, 403(b)s, 457 plans) — Contributions to these types of plans grow tax deferred, but you’ll owe income taxes when you make a withdrawal.* You can contribute up to $18,000 (for 2015 and 2016) to one of these plans; individuals age 50 and older can contribute an additional $6,000 (for 2015 and 2016). Employers can generally allow employees to make after-tax Roth contributions, in which case qualifying distributions will be tax free.

Annuities — You pay money to an annuity issuer (an insurance company), and the issuer promises to pay principal and earnings back to you or your named beneficiary in the future (you’ll be subject to fees and expenses that you’ll need to understand and consider). Annuities generally allow you to elect to receive an income stream for life (subject to the claims-paying ability of the issuer). There’s no limit to how much you can invest, and your
contributions grow tax deferred. However, you’ll owe income taxes on the earnings when you start receiving distributions.*

Tax-advantaged savings vehicles for college

For college, tax-advantaged savings vehicles include:

529 plans — College savings plans and prepaid tuition plans let you set aside money for college that will grow tax deferred and be tax free at withdrawal at the federal level if the funds are used for qualified education expenses. These plans are open to anyone regardless of income level. Contribution limits are high–typically over $300,000–but vary by plan.

Coverdell education savings accounts — Coverdell accounts are open only to individuals with incomes below certain limits, but if you qualify, you can contribute up to $2,000 per year, per beneficiary. Your contributions will grow tax deferred and be tax free at withdrawal at the federal level if the funds are used for qualified education expenses.

• Series EE bonds — The interest earned on Series EE savings bonds grows tax deferred. But if you meet income limits (and a few other requirements) at the time you redeem the bonds for college, the interest will be free from federal income tax too (it’s always exempt from state tax).

Note: Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans. More information about specific 529 plans is available in each issuer’s official statement, which should be read carefully before investing. Also, before investing consider whether your state offers a 529 plan that provides residents with favorable state tax benefits. The availability of tax and other benefits may be conditioned on meeting certain requirements.

Bottom line

Though tax considerations shouldn’t be your only investing concern, by putting your money in tax-advantaged savings vehicles and investments when appropriate, you’ll keep more money in your own pocket and put less in Uncle Sam’s.


Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information resented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“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. NASA Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

Making Phased Retirement Work for You


Phased retirement – a catchall term that describes a variety of part-time and reduced-hour work arrangements before leaving an employer for good – is gaining steam. But before you sign on, it’s important to understand how “phasing out” may affect your long-term finances.

Washington is leading the way. The federal government authorized the move for its own employees several years ago and began accepting applications in late 2014 from workers aged 55 and up with a desire to switch to half-time employment in exchange for receiving half their salary and annuity.

For employees with a long-term view, phased retirement can offer significant benefits, but it requires due diligence and planning. Among the advantages, phased retirement means that there doesn’t need to be a hard stop on a successful career. In fact, a 2014 study said that 72 percent of pre-retirees over the age of 50 report that their ideal retirement will include working “often in new, more flexible and fulfilling ways.” The study also noted that 47 percent of current retirees were already working or planning to work during their retirement years.

If your company is talking about phased retirement or may do so in the future, here are some key questions to consider:

What exactly do you want to phase into? For some workers, retirement really will mean a classic vision of travel and leisure leading into old age. But for others, the picture may be different. Some retirees will want to work and some retirees will have to work. Such decisions will summon a host of personal finance and tax issues based on your personal situation – read heavily and consult qualified experts before you make a decision.

What options will my employer offer over time? While the federal government is in the lead with phased retirement, most private employers are moving at a slower pace. This gives you time to plan. For example, in a 2013 benefits study, the Society for Human Resource Management noted that only 6 percent of employers had a formal phased retirement program that provided a reduced schedule and/or responsibilities prior to full retirement. Watch how your employer’s plan evolves and ask questions.

Phased or not, do you have a retirement plan in place? The decision to make a full or transitional exit from one’s employer should come after years of saving and investing both at home and at work. Years before deciding how you want to leave your career, talk to qualified retirement experts about your personal financial circumstances and what you want to do in the next phase of your life. If it’s a new career, volunteer work or full retirement, develop a plan first.

Have you talked to your senior colleagues? There’s nothing like direct advice from individuals closer to retirement to help you with your own set of pros and cons. Even if there’s no phased retirement program at your organization right now, it’s still worth talking about retirement preparation with senior colleagues willing to share what they’re doing. Also, start your own retirement planning in earnest with qualified retirement and tax experts.

How will phased retirement affect your overall benefits? If you’re working at a lower salary level at the end of your career, ask how that might affect your future retirement benefits. Make a list of all the benefits and perks you now receive as a current full-time employee and investigate how every single one could be affected by phased retirement. And if you leave the company permanently before qualifying for Medicare, know how you’ll pay for health insurance. This is a particularly important issue to discuss with a qualified financial or tax advisor.

Bottom line: Phased retirement can offer the opportunity to adjust to full-time retirement or set up a new career once you finally leave your current employer. However, before you leap, fully investigate how such a transition will affect your overall finances and future retirement benefits.

By Nathaniel Sillin

Important Password Security Guidelines

Hacker looking for password and user information

We have a lot of passwords these days used for everything from online magazine subscriptions to logging in to check our healthcare information. We trust many others with sensitive information and the only thing between us and that information is often, only a password.

Protecting that information is critical. Following are some guidelines regarding passwords and protecting them as well as the information they protect:

  • Don’t use words commonly found in any dictionary for your passwords. This includes dictionaries of foreign languages and slang terms and phrases. If you are thinking of substituting an “O” with a zero, don’t bother. The bad guys know about that trick. Spelling words backwards or with common misspellings; they know those too.
  • Never include personal details in passwords such as your name, child’s name, birthdates, address, or even pets. Those are not all that difficult to find out, so don’t make it easy on someone with ill intentions. 
  • When your password recovery options ask which questions you want to choose, pick ones that are not obvious and few people know the answers to; better yet, make things up. Just don’t forget your answers, if you choose this strategy.
  • Several studies have found out that using default passwords that come with devices is still very common or using simple ones such as “12345” or “qwerty.” In fact, SplashData found that in 2014, out of 3.3 million passwords checked, 20,000 of them were “12345.” The number 2 password is “password.”  Be more creative than this.
  • Password reuse is common, but a bad idea. This means using the same password for multiple accounts. Yes, using so many different ones may seem daunting, but it’s important. It’s particularly critical to make sure your social media, healthcare, and financial account passwords are completely different from one other and from everything else. 
  • When using public computers, in a hotel business center or internet café when traveling for example, make sure that the box to remember your password is NOT checked. If it is, then someone may use the computer after you and get access to your account.
  • If you are sitting in a coffee shopping enjoying a cup of joe and decide to check out the Internet using their free wireless, avoid logging into any accounts that have sensitive data, including your work accounts. Hackers are often found in these places using programs to intercept passwords. If you need to check something and it can’t wait till you get to a secured location, use the data network on your smartphone rather than the wireless. If you’re logging into your office, use a VPN.
  • It may seem obvious, but it happens a lot. Don’t tell anyone else your passwords. This includes anyone from your IT department. 
  • Make it a routine to change passwords to online accounts regularly. It is recommended to do this at least once every three months.
  • Don’t write passwords down and leave them out for others to see. If you must keep track, it is understandable. Just keep them separate from the computer and out of view. It’s better to create a clue sheet to help trigger your memory of the passwords, rather than writing them out.

It’s OK to have online accounts. They are convenient and help us stay on top of information and help us do our jobs. Just keep basic security guidance in mind when using them. 

© Copyright 2016 Stickley on Security

A Brief History of Valentine’s Day

Heart-Valentine-2016-backgroundIn addition to the United States, Valentine’s Day is celebrated in Canada, Mexico, the United Kingdom, France and Australia. In Great Britain, Valentine’s Day began to be popularly celebrated around the 17th century.

By the middle of the 18th, it was common for friends and lovers of all social classes to exchange small tokens of affection or handwritten notes, and by 1900 printed cards began to replace written letters due to improvements in printing technology. Ready-made cards were an easy way for people to express their emotions in a time when direct expression of one’s feelings was discouraged. Cheaper postage rates also contributed to an increase in the popularity of sending Valentine’s Day greetings.

Americans probably began exchanging hand-made valentines in the early 1700s. In the 1840s, Esther A. Howland began selling the first mass-produced valentines in America. Howland, known as the “Mother of the Valentine,” made elaborate creations with real lace, ribbons and colorful pictures known as “scrap.”

Today, according to the Greeting Card Association, an estimated 1 billion Valentine’s Day cards are sent each year, making Valentine’s Day the second largest card-sending holiday of the year. (An estimated 2.6 billion cards are sent for Christmas.) Women purchase approximately 85 percent of all valentines.