The Savings Spotlight Series, Part 3: Mid-Career Planning

By Chaz Gaines

In the Savings Spotlight Series, we’ve made the case that there are numerous stepping stones throughout our lives that lead us down the path to financial well being. At every point, you’ll need to take a different approach. A teenager, for instance, might be saving for their first car. An individual nearing retirement is going to have a drastically different goal, and method, for reaching their savings objective.

Already in this series, we’ve provided useful savings tips for both first-time banking customers and recent college graduates. In Part 3 we’re going to fast forward a decade or two along our path to retirement, focusing in on the savings needs of individuals in the middle of their careers.

Maximize employer benefits: Most of the businesses that offer retirement benefits will no longer contribute after you’ve left the company. Now, nearing the height of your earning power, you should be doing all you can with the remainder of your working years to take advantage—especially if your employer will match your contributions.

Balance retirement and college funds: Many individuals at this stage in their lives must reconcile the need to have a forward-thinking retirement-oriented saving strategy while simultaneously helping their children get started on their own path. It can be challenging, but your focus when crafting a budget and savings strategy should balance both.

Bolster your emergency account: Many individuals at this stage in their working life have been at their jobs for twenty years or more—making them feel quite secure. But sometimes, business decisions are out of our control, and many families get blindsided by that false sense of security. Even if you expect success, a failure to keep an emergency cash account funded could put your family at risk. Many experts believe you should have at least six to nine months salary readily available in case of emergency.

Expect the unexpected: Just like it’s important to plan for emergencies throughout your life, it’s important to plan for the end of your life too. If you were to pass away today, your grieving family would still have to keep paying the mortgage, fund college accounts and plan for retirement—all without your income. While this is a sensitive matter in which thinking about money should be secondary, it’s nonetheless a reality that your family will have to cope with. Securing life insurance will provide the coverage your family will need in the event that the worst comes to pass. Some policies, like whole life insurance, even have features to assist with your savings goals.

Shift investments to meet changing goals: Every investment vehicle offers a unique benefit. So if your financial goals are shifting, shouldn’t your savings strategy? When we’re young, we have more ability to rebound from a risky investment. We also have more time to let a certain, conservative investment grow. Now, in the middle of your working life, it’s important to take a moment to reflect on whether the vehicle that got you this far is going to be the vehicle that gets you all the way to the finish line, or if it’s time to trade in.

To learn more about crafting the best saving strategy for you and the needs of your family, check out our Online Learning Center or stop by any office of The Milford Bank in Stratford or Milford today.

The Savings Spotlight Series, Part 2: Recent College Graduates

By Chaz Gaines

There is no one-size-fits-all savings strategy that will work for every individual. The truth is, we’re all at different stages in life and must adjust our planning accordingly. What works for a teenager saving for their first car isn’t going to work for a couple in their early sixties looking to retire in the next few years.

As such, it’s important for every individual to craft a savings strategy that will best support their needs and wants for the circumstances surrounding their lifestyle. In this series, we’re looking at some of the major milestones throughout life to help our customers hone in on where their heads should be at when it comes to their savings strategy.

In Part 2, we’ll be taking a closer look at the financial needs of recent college graduates—an ever-increasing demographic that today must contend with record amounts of student loan debt as they enter the workforce. If you’re a recent grad, or know someone who is, take a look at the following tips to help get started on the right track.

Start paying off student loans: In addition to receiving a diploma, you’ll now need to start paying off your student loans now that you’ve graduated. While every individual has different degrees of financial flexibility, many experts believe that contributing 10 to 20 percent of your monthly income to paying down student loan debt will keep you on even footing in the long run.

Take advantage of employer benefits: Another benefit of leaving the classroom is that you’ll now be able to get a full time job, and the benefits that come along with it. By starting to contribute early to a 401(k) or IRA through work, you’ll have the opportunity to add significant value compared to employees who pass up the opportunity. This is especially true in cases where employers will match your contributions.

Build a personal portfolio: Relying solely on employee benefits will hinder your earning potential, so it’s equally important to start diversifying your savings and building a personal portfolio. But you’ll need to evolve beyond the simple savings account that got you through college. Given the fiscal highs and lows that can come along with being a recent graduate, certificates of deposit are sometimes a good place to start. Smartphone-savvy grads can even find great finance apps that can give an introduction to investing without the mandatory minimum contributions required for some investment vehicles.

Establish your credit: A good credit score supports long term saving because it will eventually help you to get lower interest rates on mortgages, auto loans and a variety of other important purchases you’ll make in the coming years. One option is to obtain a small balance credit card, but the easiest way to build your credit is to simply pay all your bills, in full and on time. You won’t notice the savings now, but you’ll be rewarded down the road.

Live within your means: There’s a great sense of freedom that comes when you get your first apartment or see your first paycheck deposited into your bank account as a new graduate. But just because you don’t need to eat ramen three nights a week anymore, that doesn’t mean you should be going out to eat every night either. One way to ensure that you don’t get carried away is by sticking to your budget. But it’s also important to put yourself in places, and surround yourself with people that won’t encourage you to spend exorbitantly.

College graduates have their entire lives ahead of them, and by taking a careful approach to saving now they’ll have many more chances to enjoy themselves down the road. Of course, they’ve got to balance that so they can enjoy the benefits of truly entering adulthood, too. At The Milford Bank, we’ve been helping college graduates in Milford and Stratford navigate this new point in their lives for generations. To learn more, stop by an office location near you or check out our Online Learning Center here.

 

The Savings Spotlight Series, Part 1: First-time Savers

By Chaz Gaines

Every individual has different goals and unique circumstances that help to guide the decisions they make when it comes to their savings strategy. Some people have decades of work ahead of them to steadily sock away money for retirement, while others are looking to gain ground quickly with retirement just a year or two away. Some individuals have large families with children to send off to college, while others are responsible for only themselves.

In the Savings Spotlight series, we’ll take a look at some of the big benchmark moments throughout life. We’ll look at how teens, recent graduates, young families, and those closer to retirement all have varying needs that require a different savings approach.

In Part 1, we’ll provide some savings advice for teenagers who are first-time savers. Just because they’re young, it doesn’t mean that their summer jobs or weekly allowances can’t help them to begin building a robust portfolio to maximize their savings now. If you’re a teen, or have a teen, who is just starting to learn about saving money, here are a few tips to get them started.

Distinguish between short, medium, and long term savings

It’s important for kids to be kids, while also learning fiscal responsibility. As such, there’s nothing wrong with a teen wanting to save up for a concert or snowboard at the same time they’re saving for college, or even retirement. It’s simply about making a clear distinction and sticking to your plan.

Putting savings strategies into context

When it comes to long term saving, it is easy for teens to be too reactionary. For instance, a minor stock market correction could seem like the next Great Depression if you don’t have the benefit and wisdom that comes with watching such fluctuations occur for decades. Teens must remember that, depending on the investment vehicle, the money they set aside today may not be used again for another half century. As such, it’s best to set a strategy and stick to it, rather than continually pull your money in and out of savings to try and time the markets.

Thinking about risk and reward

Risk and reward are inherent in any investment. Finding the most optimal vehicle for your needs is all about striking the right balance between risk and reward. Young investors don’t typically have the assets to make a lot of risky investments. But conversely, they’ve got lots more time to make up ground if a high risk-high reward investment doesn’t pan out. Young investors are in a unique opportunity to use their age to their advantage, but you must assess your risk tolerance carefully first.

Never too young for life insurance

While teenagers might think they’re immortal, certain types of life insurance can offer significant savings upside for teens. Whole or permanent life insurance contracts provide additional savings components, as they accrue cash value when you make premium payments. And because age and health are critical elements in determining the premium costs of a life insurance contract, the younger you are when you lock in your rates with a permanent plan, the cheaper it will be and the earlier you’ll start saving. Not only will you protect yourself and your future family later in life, but you’ll have a big leg up on your cash value investment too.

At The Milford Bank, we have helped countless members of the Milford and Stratford community develop successful savings strategies for their wants and needs. No matter where you might be with your own personal savings strategy, we can help. Stop by any Milford or Stratford location near you, or check out our Online Learning Center to learn more.

And be sure to stay tuned for Part 2 of this series, when we’ll be highlighting savings strategies for recent graduates.

FDIC Reports 10 Scams Targeting Banking Customers- Part 1

By Dave Wall

The holiday season is upon us once more in Milford and Stratford, and we’d be willing to bet that you’re one of the millions of Americans that has already helped to make the 2017 holiday shopping season a record-setter. But in the flurry of transactions and the general chaos that is the holiday season, it can be difficult to stick to financial security best practices.

However, according to the FDIC, it’s now more important than ever.

In a recent report, the FDIC issued a list of 10 scams being perpetrated today by con-artists looking to empty bank accounts, steal financial data and ruin much more than your holiday.

In this series, we’ll take a deeper look at the list so that you can stay on alert through the holidays and throughout the rest of the year, too.

  1. Government Imposter Frauds: If you get a call, an email or letter from a government agency requesting that you make an immediate payment or provide personally identifiable information (PII) on the spot, you’re the target of a government imposter. Government agencies will never ask for PII or a payment in the moment.
  2. Debt Collection Scams: Criminals will often pose as debt collectors or law enforcement officers in an attempt to shake down unsuspecting individuals who may already be having a tough time dealing with debt. If the individual cannot produce records, or threatens violence or arrest, you will know that it is not a legitimate claim.
  3. Fraudulent Job Offers: Background checks are part of many legitimate job offers. But some con artists are now using online classified ads to draw in job seekers with cryptic promises of employment. They’ll request personal information to conduct what they claim is a background check, when in reality they’re using the information to steal your identity. You’ll have to do your due diligence when looking for employers, so be sure to gather all the facts about a company before you comply with a background check.
  4. Phishing Emails: Phishing emails use spoofing software to mimic the email address of your contacts. They will then disseminate an email—typically with malware embedded within a link in the body of the text—in the hopes that someone will click the attachment. This will then give the hacker remote access to your device, helping them to find your financial records and PII.
  5. Mortgage Foreclosure Rescue: There are plenty of homeowners out there having a hard time making ends meet. But if you’re approached by a loan broker or consultant with an offer that sounds too good to be true, it probably is. They’ll promise you anything in exchange for a down payment or personal information, but in many cases victims end up getting foreclosed on anyway. In other cases, victims are even tricked into signing away ownership of their property to the scammer.

To learn more about how to follow financial security best practices, stop by a Milford Bank office location in Milford or Stratford, or check out our Online Learning Center here. And be sure to keep watch for Part 2 of this series, when we’ll be delving into the FDIC’s remaining 5 scams targeting banking customers today.

Baby Boomer Retirement Challenges, Part 2: Strategies for Success

By Sindy Berkowitz

Every day, roughly 10,000 Baby Boomers retire. But many of them do so unaware of the challenges they will face when living off their savings alone. The Insured Retirement Institute recently found that the average American will enter retirement with an income gap ranging from $3,864 and $12,072. Such a disparity is unsustainable, and even if it doesn’t disrupt your lifestyle now, it is likely to do so in your later years when you’re less capable of addressing the problem.

In Part 1 of this series we addressed some of the core challenges facing American retirees today. In Part 2, we’ll take a look at some ways that you can alleviate your retirement concerns.

Consult with a financial advisor: Retirement planning is a big job, and it can be difficult to have the knowledge and experience necessary to go it alone when trying to maximize your wealth to meet your retirement objectives. A financial advisor can help you get the proper context, help you shape a budget, and offer great advice to help you plan effectively.

Take advantage of employer benefits: If your company offers a pension plan or retirement account benefit like a 401(k) or IRA, you should do everything you can to take advantage now—especially if your company matches contributions. After you retire, certain benefits may no longer be available to you. If all your retirement accounts are already fully funded, you have other options available. If you’re over 50 and just starting out, though, you may be eligible for catch-up contributions that offer higher contribution caps.

Put additional funds into an annuity: Annuities provide a guaranteed income stream for life, making them a good consideration for retirees. Annuities, unlike 401(k) or IRA accounts, do not have a maximum contribution limit, and have several other unique characteristics that set them apart from other retirement savings accounts.

Delay Social Security payouts: Retirees can begin collecting Social Security at age 62, but your monthly paycheck depends upon when you start collecting, and your full retirement age. Every year that you delay past your full retirement age increases your payout by 8 percent. So if two individuals with a full retirement age of 65, for instance, start collecting Social Security at 62 and 67 respectively, the individual who deferred payouts will see a 30 percent higher payout.

Asess your risk tolerance: All investment vehicles will come with a varying degree of risk. That’s why it’s important to diversify your holdings. That said, every individual has a different lifestyle, different goals and expectations for retirement. While some retirees want a more conservative, low-risk and assured income in retirement, others may find themselves looking to take a more aggressive approach to accumulating wealth post-career.

At The Milford Bank, we have been helping Milford and Stratford retirees develop successful saving strategies for generations. But Baby Boomers face unique challenges unlike those before them. To get started with a retirement strategy that will work for you, stop by a Milford Bank location today. You can also learn more by checking out our Online Learning Center.

Baby Boomer Retirement Planning, Part 1: The Challenge Ahead

By Sindy Berkowitz

Earlier this year, the Insured Retirement Institute released its annual study covering the Baby Boomer generation and its financial preparedness for retirement. Since the IRI’s first publication in 2011, the number of Americans over the age of 65 has increased over 18 percent. Yet, despite the steady incline of retired Baby Boomers, this year’s study demonstrates that this generation still has yet to find answers to some of the greatest challenges facing Americans in retirement today. In fact, only 23 percent believe they have enough saved to last their entire retirement.

This series will dive deeper into the state of Baby Boomer retirement planning, providing insights into the unique challenges ahead for the average American retiree. In addition, we will offer several ways to help you start putting your planning on the right track to ensure that you and your loved ones can maintain the quality of life you’ve worked so hard to achieve.

In Part 1, we will take a closer look at some of the biggest challenges you’ve got to address in order to ensure that your wealth lasts a lifetime.

Inflation: The cost of everything, from a gallon of milk to real estate, is subject to inflation. On a yearly basis, you might not notice the incremental price increases, but over time, inflation will degrade your buying power. As funding a retirement account is a long-term savings strategy, you must factor inflation into your planning.

Market fluctuations: Investments tethered to the stock market can offer a strong return on investment, but they can also leave you more exposed to risk.  If the markets enter a period of decline as you reach retirement age, you may be forced to find other means to recover.

Medical expenses: Americans are, fortunately, living longer than ever. But that also means that retirees will likely have more medical expenses to account for as well. According to the IRI’s 2017 report, 82 percent of Baby Boomers underestimate the cost of medical expenses to come.

Income gap: Pension participation is not as common as it used to be, and Social Security will only account for a portion of the paycheck you received during your working days. Many Americans don’t realize that assured income streams may be lower than the monthly expenses they’ll see in retirement, setting them up for a gap in wages that must be recovered to maintain their lifestyle.

At The Milford Bank, we’ve helped countless individuals—from their first savings account, to retirement planning, and everything in between. We are ready to work with you to craft a saving strategy that will help you navigated the uncharted waters of retirement.

Be sure to check back next time for Part 2 of this series, when we’ll be discussing some strategies to help you avoid the challenges you face in retirement planning. You can also learn more by checking out our Online Learning Center here.

Talking Dollars, Cents and Sense about Flu Season

By Lynda Mason

Living in New England, Milford and Stratford residents always have something special to look forward to at this time of year. We’ve got brilliant foliage in the Fall and picturesque, snowy landscapes in Winter. But there’s one seasonal event that nobody in New England is looking forward to: flu season.

While most of us consider the flu to be a minor inconvenience, the truth is that this seasonal contagion has a significant part to play for just about every family in the country.

According to the Centers for Disease Control, up to 20 percent of the U.S. population contracts influenza on an annual basis. So even if you’ve managed to steer clear, the chances are good that someone in your home will catch it—and it could cost you much more than a few boxes of tissues.

The CDC reports that flu cases cost $10.4 billion a year in direct medical expenses and $16.3 billion in lost earnings. Children, meanwhile, will miss 32 million days of school each year due to the flu.

Further, the flu leads to tens of thousands of hospitalizations, and worst of all, thousands of deaths caused by flu-like symptoms.

Looking at these figures makes it clear just how devastating the toll of influenza can be. Fortunately, there are plenty of simple steps you can take to ensure that you don’t contract, or spread, the flu this season.

Review the CDC’s updated influenza guidelines: Every year brings a new strain of influenza. This year is expected to be more virulent than the 2016 version, so it is important to stay informed. You can check out the CDC’s 2017-2018 flu season guide here.

Avoid doctor’s offices and hospitals: As a contagious virus, doctors’ offices and hospitals are natural vectors for the flu. There are good odds of encountering someone with the flu, or passing it to others, if you go to these facilities. For that reason, many individuals opt to act preemptively and get flu shots at retail pharmacies before they get sick. If you think you may have the flu, check with your PCP about their telehealth services so that a doctor can diagnose you over a videoconference instead.

Of course, every individual has different needs when it comes to flu shots, and you should consult with your physician to first see if it is the right decision for you or your family.

Practice good health habits: The flu, like any other germ, cannot thrive in a sterile environment. While the CDC does state that flu shots are the single most effective way to prevent flu, it also names a number of health-conscious choices you can make that will help you avoid contracting the virus. This includes: washing your hands, avoiding touching your eyes, nose or mouth, drinking lots of fluids, getting lots of sleep and eating nutritious meals.

At The Milford Bank, we believe that physical health and financial health go hand in hand. Taking care of your body will help you take care of your finances, so when it comes to flu season, we want to make sure our customers don’t end up spending the next few months in bed with a thermometer under their tongue and a ball of tissues in hand. To learn more ways to stay in good shape—both physically and financially—check out our Online Learning Center here.

There’s No Reason to Be Scared Over Record Halloween Spending

By Celeste Lohrenz

It’s not uncommon to stress when it comes to holiday spending. We’ve all been there, with a list of presents in one hand and a suddenly shrinking wallet in the other. But it usually takes an entire season of spending until we reach our tipping point racing around for a hot-ticket item on Christmas Eve.

This year, however, consumers may start feeling the pinch a little earlier this season, as the National Retail Federation reports that Halloween spending is expected to hit a record—$9.1 billion—this year.

But that doesn’t mean you have to get spooked into record-setting spending yourself. In fact, there are plenty of ways that you can make sure to keep your costs down without sacrificing the spirit of Halloween.

Let’s break down some of the figures from the National Retail Federation’s report to show how you may be able to save a few dollars yourself.

Costumes: The NRF reports that costumes are the highest priced item on the Halloween shopping list. The average man will spend $96 on a costume, while women will spend $77. Costume shops will often have prepackaged costumes ready to go, but they will come at a premium. But if you have a  knack for arts and crafts, you may be able to build your own costume by shopping at discount retailers, thrift stores or pawn shops instead.

Candy: 95 percent of consumers who responded to the NRF study planned to purchase candy for Halloween, either to pass out to children or for a Halloween party. If you wait until the last minute, you may be stuck paying higher prices. If you act early, though, you may be able to shop around for the best bulk purchase.

Decorations: Thinking of putting a scare into trick-or-treaters with an elaborate decorative lawnscape this Halloween? Just remember that in some cases, you’re not just paying for the decorations. Decorations that use electricity—especially the inflatable ones for your yard—will end up costing you an additional sum beyond what you pay at checkout. You just won’t see it until your November utility bill arrives. Be careful with your decorations. Look for solar options when possible, and if you do need to plug something in, be sure to unplug it at the end of each night. Even if you turn the power off, anything that is still plugged in will use electricity.

Be sure to check back with us frequently this holiday season, as we’ll be offering advice to help you navigate your way right into the New Year. You can also learn more about managing your finances at our Online Learning Center here.

 

Money Talks—How You Should, and Shouldn’t, Discuss Your Finances

By Pat White

There are few things in life more uncomfortable than talking about finances. In fact, people are even seven times more likely to discuss their love life with a total stranger than they are their salary. Despite the difficulties we have with communicating about our money, it is nonetheless important to do so.

If you have children, it is imperative that they learn early how to respect and recognize the value of a dollar. Whether they just opened their first checking account or are saving up to buy a car, it’s up to you to guide them. The lessons you impart onto your children now will forge an indelible mark on their financial decision making processes for years to come.

Couples might find this topic a little more difficult. Each partner comes in with habits and strategies of their own already in place. In these cases, it isn’t necessarily a matter of educating the other partner, as with children. Instead, it’s a matter of having open and honest communications about where you stand now, where you want to end up, and how you’ll get there as a couple. This is as true for a middle-aged couple planning for retirement as it is for a couple that has just started dating.

Of course, when having these conversations, you should be mindful of the fact that it can be a touchy subject. In order to make sure the conversation is a productive one, consider the following tips on how you should, and shouldn’t talk about money.

Point the finger at yourself: In a partnership, both parties need to agree to a strategy—and stick to it. But what do you do when your partner strays from the plan? You wouldn’t necessarily be wrong to call their attention to it. But we’ve all made mistakes, and they might remind you of that fact. Such conversations can quickly escalate into finger-pointing, justification and hurt feelings. Instead, turn the attention onto yourself. Mention to them how you intend to curb your own overspending, or give an example of how you overcame a similar obstacle in the past. They’ll likely get the point without the feeling of being under attack.

Make it about the math: Numbers don’t lie. They’re objective, rational and provable. So why do difficult conversations about money quickly get overtaken by emotion? It’s when we stray from the numbers that our passion can get the better of us. When talking about money be sure to set aside any other grievances you may harbor and simply stick to the facts at hand.

Finding the middle ground: Currency only works because we all accept the value of money as a society. But that doesn’t exactly mean that everyone values money in the same way either. Some are happy to watch their savings account grow, while others would rather spend their paycheck right away. As such, you can’t assume to have all the answers when talking finances with others.  Appreciate their perspective as you’d hope they would do for you, and always be ready to find a compromise that meets the needs of you and your partner, family or business.

Talk in percentages: Calling attention to your finances can make those in different economic circumstances uncomfortable. In some social circles, it’s even considered a faux pas. In order to have an honest conversation without calling attention to your actual worth, speak in percentages. Rather than saying you’ll invest $20,000 into a Mutual Fund, say that you’re investing 20 percent of your assets instead. It keeps the conversation vague enough to be respectful, while open enough to be engaging and honest.

Of course, at The Milford Bank it’s our job to talk finances. We’ve heard it all before and are always ready to listen. If you’re ready to talk finances, stop by an office location in Milford or Stratford today. You can also find more valuable resources at our Online Learning Center.

 

Five Key Takeaways from the MEF Banking App Study

By Matt Kelly

There are more smartphones in circulation today than ever before, so it should come as no surprise that mobile banking app usage is on the rise again too. In fact, 61 percent of people use their bank’s app on a daily basis, according to a Mobile Ecosystem Forum’s “Mobile Money Report”, released earlier this year.

The report, a consumer study spanning 6,000 individuals in nine countries, highlights the continued emergence of banking apps as a critical touch point between financial institutions and their customers.

Let’s take a deeper dive into some of the significant details of the report below:

Consumers place trust in their devices. In the MEF report, consumers were asked which processing method they trusted most when using a credit card. A quarter of respondents preferred mobile-optimized websites or simply storing credit card data within a mobile app. Only 17 percent felt better handing a card to a store’s employee, while only 6 percent felt safe reading details over the phone.

Mobile experience is as vital as branch experience. 28 percent of respondents to the MEF study said they preferred to do their banking at branches. However, app users are quickly gaining ground, with 26 percent preferring that option. Financial institutions must recognize the value of mobile experience, and those that create a seamless experience between apps and branches will likely gain a competitive foothold in the years to come.

Engagement is up, but visibility is down. With the introduction of mobile banking solutions, financial institutions are seeing more engagement with customers on a daily basis. 78 percent have made a mobile purchase over a six month time frame. 44 percent check their balances, while 29 percent pay bills with their smartphone. So while banks may not necessarily be seeing their customers every day, our devices are enabling us to make banking a more significant part of our day-to-day lives.

Privacy remains a top priority. 31 percent of MEF survey respondents claimed that they had abandoned purchases in the past because they were asked for too much personal information. With customer privacy a critical factor in cybersecurity conversations taking place within the financial industry, banks must work together with the retail industry to find ways to streamline purchasing processes while simultaneously shoring up consumer concerns at all points in the customer journey.

Apps aren’t the new plastic—yet. Only 18 percent of consumers have used their phones to pay for goods inside a brick-and-mortar store. The question is whether or not this figure is going to continue climbing or simply stagnate. But clearly, apps are now being developed to play an even larger role in your financial decision making. MEF suggests, though, that if such apps continue to expedite consumers’ financial transactions, it may become more popular.

At The Milford Bank, we’ve worked hard to provide our customers with as great an experience in our app as you’d have by stopping by one of our Milford or Stratford office locations. To learn more about how we’re keeping up in this ever-changing world to support you and your family, click here.