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The Benefit$ of Returning to Iowa

vetsMy daughter, her husband and two kids have lived with my husband and me since her husband retired from the Air Force in late April. Last week their belongings arrived from Japan, filling our two-car garage. We are excited to have them living close now, after 6 years of living so far away. We are doubly blessed now that her husband has found employment 20 minutes from our home. Soon, they will purchase and move into their first home. In May of 2014, Governor Branstad signed the Home Base Iowa bill, making this all possible.

The Home Base Iowa bill was designed to support veterans already living in Iowa and to provide  financial and employment incentives to attract those leaving the military. My daughter and her family are the recipients of some of these benefits.

My son-in-law received preferential treatment as he began his job search.  His current employer was not actively seeking new employees when he willingly interviewed and hired him. His employer said he always tries to find a place for any vet wanting to stay in the state.

The Military Homeownership Assistance Program provides $5000 in down payment and closing cost assistance. At tax time, the assessed value of their home will be reduced for property tax purposes, by $1850, reducing their tax obligation.

When he is ready to retire, his retirement benefits will be exempt from state income taxes.

My daughter and family are excited about this new phase of life and look forward to moving into their new home. The VA Loan process is now in the third month and moves agonizingly slow, but the savings will be well worth wait.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Auto-pilot on your 401(k)?

money jar - cropDid your employer auto-enroll you in a retirement savings plan when you started your job?  If so, your employer is following a trend that has been emerging over the past ten years or so.  Auto-enrollment means just what it sounds like: you are automatically signed up for the 401(k) plan (or whatever plan your employer offers).  People can opt out, of course, but if they’re typical human beings, they probably won’t make the effort to opt out.  [Yep, most of us give in to inertia — just leave things the way they are!]

Auto-enrollment is a good thing, over all.  It helps people get started with retirement savings.  But just because you were auto-enrolled, that doesn’t mean that you should stick with auto-pilot for the long term.  Here are a couple of ideas to consider, either when you start or sometime down the road:

  • Consider gradually increasing your contribution.  Many employers auto-enroll employees at 3% of their pay.  Saving three percent over the long-term is not enough for most people to build retirement security.  If you increase your contribution every year when you get a raise, you’ll hardly miss the money.
  • Maximize your employer match.  Some employers match contributions up to 5% of pay — or higher.  If you are enrolled at 3%, but your employer would match 5%, then you’re not taking advantage of all your employer might offer.
  • Examine the “automatic” investment selection.  Most employer-based retirement plans offer several different types of investments (usually a selection of mutual funds).  Employers usually chose a moderate-to-conservative investment when they auto-enroll their employees.  At some point, when you have had a chance to learn about the options, it would be wise to evaluate whether the automatic option was the best one for you.

Read more tips from FINRA (www.finra.org), which is an excellent source for investing information.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Documents Needed When You Get “The Call”

papersAs our parents age, it is a time of celebration and preparation. Celebration because of all they have experienced and the wisdom they have shared with us. Preparation because end-of-life is a given for us all. Some people easily talk about their end-of-life wishes and some do not even want to go there.

My brother and I got “the call” on Saturday – our mother had a severe stroke. We drove the long hours to reach her and spend the last days by her side. She wasn’t able to speak or move one side of her body. She was in pain. She wasn’t going to recover. As we were together in the hospital, we quickly realized there were documents we needed with us so decisions could be made on her behalf.

We fetched the following documents:

  • power of attorney
  • long term care insurance policy
  • durable power of attorney for health care
  • living will (also called advance directives)
  • will

You may want to think ahead too of what your family will need if you are unable to make health care decisions for yourself or you are nearing the end of your life. It isn’t always easy to fill out this paperwork but doing so makes it much easier on the family that will care for you when the time comes. They then know your wishes and their roles in the decisions they will be asked to make.

To get you started, download PM 1463 from the Iowa State University Extension and Outreach Store – Money Mechanics: Estate Planning and Legal Issues in Later Life .

ISU Extension and Outreach Human Sciences specialists in family finance offer a workshop series called The Finances of Caregiving. Contact your family finance specialist about this new program. It helps the caregiver and care receiver organize all the information needed into one place and prompts discussions among family members to make decisions about end of life issues.

SandraGuest Blogger – Sandra McKinnon is a Family Finance Specialist that wants you to start preparing for end of life issues now.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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After The Call

phone callWe got “the call.” Mom had a major stroke one Saturday evening and was buried the next Saturday.

The chaotic week left my brother and I to work and talk together like never before.

The unexpected death put us in a whirlwind – emotionally, physically and psychologically.

There were initial decisions to be made with the funeral home plus meetings with the lawyer.

Add to the mix the fact that both of us live several hours away and are still employed full-time, and you can envision the hectic atmosphere.  We made hurried decisions – each individually regarding our own jobs and families, and also jointly regarding family needs and immediate plans.  And we acted on those decisions to the best of our ability, from the hospital and from the town of our loved one.

Thankfully, our mother was organized – in her own way. Finding necessary files and contact information was confusing, especially when we didn’t really know what we were to be looking for. For example, we spent time frantically texting relatives and digging through mom’s old high school and college yearbooks for information for her obituary and funeral program.

I’m a practical person and I think I’m organized for end of life paperwork. I now ask myself, what will make sense to my son when he has to come to town after receiving “the call?” How can I help him avoid the chaos and the whirlwind?

Before you receive “the call,” start a folder, notebook or file.

Add to it 2 quick things:

  • Your own obituary.  It took me 10 minutes to do my own, because I knew the information or knew where to look to get it. Doing so ahead of time saves my son from trying to find all the dates of marriage and graduations, and listing of relatives (alive or passed). It can always be updated.
  • The free publication Decisions After a Death. It will get you thinking about what documents you’ll need to get your hands on now and who to contact.

Then work on preparing yourself and loved ones. ISU Extension and Outreach Human Sciences specialists in family finance offer a workshop series called The Finances of Caregiving. Contact your family finance specialist about this new program. It helps the caregiver and care receiver organize all the needed information into one place, and prompts discussions among family members to make decisions about end of life issues.

SandraGuest Blogger, Sandra McKinnon is a Family Finance Specialist that wants you to start preparing for end of life issues now.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Money Smart Week 2016

Next week is Money Smart Week! Started 14 years ago by the Federal Reserve Bank of Chicago, Money Smart Week is designed as a public awareness campaign to help IMG_0039consumers better manage their personal finances. There are programs in all 50 states. Here in Iowa, more than 200 partner organizations have joined in the fun, promoting financial education with many interesting opportunities to learn. All Money Smart Week programs are free, and strictly educational (no marketing allowed).
ISU Extension and Outreach has been a MSW partner for many years. Programs are offered for audiences from preschoolers to seniors. From scout nights to shred days, essay and poster contests, geocache for college cash, piggy banks, books, and kites – in many cases, a chance to win a prize makes the learning even more fun. Educational program topics include establishing a budget, protecting financial information, raising money-smart kids, and more.

Go to www.MoneySmartWeek.org for more details about activities in your area. Check out your local libraries for a display as well as programming. Spread the knowledge!

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Opening the Tough Conversation

older couple smNo, I am not talking about the birds and the bees. It is the conversation about where are your parent’s important papers – wills, life insurance policies, investments, personal advisors and such.

During the holidays, my brother-in-law asked the question during breakfast. His father had died about three years ago; he and his brother thought his dad’s paperwork was in order, until they had to go looking for specific documents.

Much to the surprise of my sister, brother-in-law and myself, our discussion with our parents revealed several items of information about my parent’s financial situation we were previously unaware of.  We found out what financial institutions held their investments and who was the lawyer for their wills, as well as where the hold investment accounts.

When my Grandfather Taylor died, his lawyer had died before him, so the family had to find which law firm had taken over his files.  That was time-consuming and stressful at a time when family members already had much on their minds and hearts.

Some people feel like asking these questions would be prying into their parent’s affairs, but the discussion with my parents showed that it can really help to improve family understanding of the basic financial and legal details they will eventually need to know.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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What’s on Your Goal List for 2016?

2015-08-20 08.29.08I was recently asked by my supervisor for performance goals (key actions I plan to work on); these are due by the end of the year. We do this so we keep moving forward, rather than standing still or sliding backwards in our skills and our work.

As we turn the New Year calendar, it may also be time for us all to consider setting goals for our personal lives. As the ball drops in Time Square in New York City soon, many of us make resolutions or set some goals for our lives in the next year.

As I consider my personal goals for the coming year I approach it from several directions:

  • Things I want to do – “bucket list” items.  I am sure travel will continue to be on my list.
  • Major projects that need to be done around my home: some updating of the electrical system needs to be on my list.
  • Smaller projects – I want to cull through my closet and pull out clothes I haven’t worn for a while; I can give these items to Goodwill for others to use.

Last year, I replaced a car. I visited the Grand Canyon and saw parts of Arizona I had not seen before – Sedona, Flagstaff, Jerome and Williams (where I felt like I was in the Cars movie!).  It feels good to look back and see what I accomplished in the past year.  I now want to set some clear goals for the coming year, so I can keep moving forward.

What’s on your goal list for 2016?

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Granny Pods

camperMy only memory of a great-grandmother on my mother’s side is of her home; a small, silver, drag-behind camper. It was parked about 50 yards from my mother’s childhood home. My mom was the oldest of 9 and I loved going to visit her family in the wooded acreage deep in the Missouri Ozarks. We (my twin aunts who were a year younger than me, a cousin and my siblings) were a noisy, wild and crazy bunch that ran around, exploring and climbing trees. I can understand why my great-grandmother would want a place of her own with all the chaos that took place in the main house.

I stumbled across an article (https://seniorcareadvice.com/my-mother-lives-in-the-backyard-the-granny-pod-evolution.htm) addressing the looming problem of how to care for America’s rapidly aging population. The “Granny Pod” is a pre-fabricated and pre-equipped medical cottage that can be parked in the backyard of a caregiver’s home…assuming the zoning laws permit it.   This tiny house is then hooked to the existing sewer, water and power lines.

I need to point out that the article describes one particular “granny pod” product, and is not a comprehensive non-commercial overview of everything available on the market.  Even so, it provides great insight into new types of options that are arising as families seek the best environment for aging family members.  The homes described in the article cost up to $125,000 installed, complete with all things needed to age in place, including interactive video and devices that monitor vital signs and transmit real time readings to caregivers and physicians. Cameras and sensors alert caregivers to any falls, the toilet seat records weight and temperature, a hammock-like chairlift transports a resident from bed-to-bathroom, and a computer reminds residents when it is time to take medications.

The 12’ x 24’ bungalows resemble a hotel suite with living space, small kitchen and bathroom. The initial cost may seem steep, but compared to nursing home care (which can be more than $50,000 a year for a semi-private room) it will not take long to recoup the cost. What’s more, this particular company will buy back the unit when it is no longer needed. These units offer older adults some independence and closeness to family and friends instead of isolation in a distant nursing home.

It looks like my great-grandma was ahead of her time living in a Granny Pod/camper. Unlike the Tiny Houses I talked about on 12/8/15, I could see myself living out my final years in one of these. The question is…which of my kids won’t find this too close for comfort?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Tiny Houses

house1There are a couple of new shows on TV that focus on Tiny Houses. These are homes that have less than 500 square feet of living space. Some of the home owners are looking to reduce their environmental footprint and minimize their impact on the environment. Others are looking to live debt free so as to have more money to spend on traveling or other priorities. All had to drastically downsize the amount of stuff they owned.

Many of these homes are on wheels and can be moved – some more easily than others. One young woman had a job that required her to move every 6 months and she was tired of packing and unpacking her belongings. A tiny house on wheels eliminates many of the hassles that come with each relocation. She did not want to have to spend an estimated $1500 every six months to pay someone with a semi truck to move her tiny house so…she was looking for a VERY tiny and lightweight home that she could move herself, using a pickup.

The designers/builders of these micro homes take into account the needs of each family. Some have small children. Others have teens. Some have lots of craft hobbies and wanted space to store and engage in those activities. Others love to preserve food, cook and bake…requiring full-size appliances. Some want to live off-the-grid by using solar power, collecting rainwater and using a composting toilet. Some of these structures are built with all reclaimed materials; others with all new but recycled materials.  All tiny homes need a place to park. Some can set down on the property of friends or family members; others choose to purchase land.

I know I need to downsize my stuff. It takes time, energy and space to maintain, store and insure STUFF. I have tried to picture myself living in a Tiny House after I retire, but for me retirement means I will finally have time to quilt, paint, weave baskets, garden, fish, kayak…you get the picture. I have a lot of stuff I am hanging onto and looking forward to using in retirement. Despite the real merits of this lifestyle, I don’t think a tiny house is in my future. How about you?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Finding the Right Financial Advisor

Couple meeting with loan officer

Four years ago, I moved to Iowa. At that time I had an investment account that was located in Indiana. I wanted my investment account a little closer to where I lived. So in the process, I needed to interview current financial advisors to select the best person for my investments.

I went in with a handful of questions to ask each person. Here are few of the things I wanted to know:

Find out the educational background and current certificates and licenses the financial advisor holds, and his/her on-going educational experiences. During this conversation, you will hear clues to whether the person is genuinely qualified or boasting. Yes, the prospective advisor needs to be educated. Financial planning is a very broad discipline – including investments, insurance, cash flow, taxes, estate planning and retirement planning — and there is a lot to learn.

Credentials are important too.  The Certified Financial Planner – CFP —  designation is a good indication that an advisor knows what he or she is doing. To earn the certification they must have at least five years’ experience – meaning you are not their “guinea pig” client. With more experience comes the ability to work through multiple serious financial issues.

Understand if the advisor operates under a “fiduciary” standard. This has a legal and regulatory obligation to act in a client’s best interest at all times. Not all advisors have made that commitment.

By doing your homework, including interviewing at least three people, you can help make sure that you find the right financial advisor for you. For details see unit 10 of Investing For Your Future, a top-notch national Extension resource.

 

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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