Fraud is not Immune to a Virus

scam alertCovid-19 has affected our world and changed the definition of what “normal” is. People around our area, as well as across the country have started to feel the financial effects of this virus.  Gulf Coast Educators is prepared to handle this difficult time and will continue to assist our members in the ongoing weeks.

With businesses all around making difficult decisions to send workers home, or close all together; we understand the financial stress this puts on everyone.  As a lot of things are changing and adjusting around us, the one thing that is immune to this virus and will continue is fraud. Unfortunately, the credit union deals with fraud every day, and this will continue as well. Currently, one of the most frequent types of fraud we encounter is the “Work from Home Scam.” Fraudsters will use apps such as LinkedIn, Monster, Indeed, as well as direct emails and pose as job recruiters wanting you to be personal assistants or shoppers, the best part is that you can do this from your own home. They will send you a check, usually meant for “purchasing supplies” and some extra for yourself. They will ask you to deposit into your account, then wire money back or send some form of gift cards. By the time you do this and send the funds back, your check has been returned and now your account is negative.

With everyone either on “self-quarantine “or not having a job during these times, there is a chance that we will see an increase in this type of fraud. Gulf Coast Educators has an excellent fraud prevention team that is dedicated to not only preventing fraud, but helping our members when their accounts have fallen victim to it as well.  We are constantly training our staff on how to recognize a fraudulent check or scam. Here are some things that can help you identify them as well:

  • The check the scammers will send you will be from out of state and generally overnighted to you at your home.
  • The amount of the check will always be under $5,000 (because they also know the check hold rules for financial institutions) and we have seen them over time be in the range from $2,000 to mid $4,000 range.
  • Like I mentioned above, they will ask you to send funds back somehow, and they will want to have this turnaround be quick as possible.
  • Correspondence will be used in all types of methods, including email and texting.
  • When members have shown us their conversations with scammers in past, we have noticed several grammatical errors that they use.
  • Our front-line staff have been trained to ask questions to you to fight fraud. Scammers are starting to realize this and will instruct you “not to talk to or answer any  questions from credit union employees” when depositing the funds.

These tips are just some of the ways that you can also fight and spot fraud before it happens. Unfortunately, we now live in a society where scammers will try and take advantage of people during extreme hard times and situations. With all the precautions and measures the Coronavirus has made everyone take, fraudsters will use these times of hardship and financial uncertainty to lead you to believe they are trying to help.  In reality, all they will end up doing is causing more stress and burden.

Gulf Coast Educators is always here to help and assist you, with any questions you may have. If you have questions about if a check is real or if you are uncertain if your situation is one that is fraudulent, give us a call or chat with us online and we will make sure and answer your questions. Gulf Coast Educators will remain open through our Contact Center, Website, ITM’s and Drive Thru.

 

 

Post author: Adam Smith, Branch Manager – League City

The opinions expressed on this page are for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of the article and may not reflect the views of the credit union.

Buy low and sell high

Now seems like a perfect time to recite the advice my dad gave me when it came to the stock market: “Buy low and sell high”. I suppose this applies to everything you consider an investment including baseball cards, art and real estate. But like most of you, currently anyway, it applies to our investments in the stock market including our IRAs, 401(k)s and 403(b)s. In a previous post I discussed the emotional reaction to owing the IRS with your tax return. I stated that if you took the emotion out of it, you’d probably favor the smallest refund possible.

The same applies to your long-term retirement investments. As we see record drops in the market, we need to be reminded to take the emotion out of it and not sell low. So how do you take the emotion out of it? A lot will depend on the stage of your career you are in. Obviously, if you were looking at retirement within the next few years then you are more emotionally invested versus a person just starting their career and contributing to retirement vehicles for the first time.

A few tips that I try to live by when it comes to my retirement investments:

  • Don’t look at gains or losses over the short term. Try to look at longer term to get a better idea of the overall growth of your retirement investments. Don’t log in every day to see the drops. I didn’t log in everyday when it was on the rise so I shouldn’t do that when I know it is likely dropping.
  • Make sure to review your portfolio every year or so and make changes based on the length of time until your retirement. Get expert advice if needed to determine what a good strategic mix of stocks versus bonds is for your retirement goal. Most 401(k)s and 403(b)s will have automatic age based balancing options that you can use.
  • Every other week when I’m contributing to my 401(k) or IRA, I remind myself that during these down times that I’m buying more shares. So, shift from looking at dollars to shares and you take some of the raw emotion out because you are not focusing as much on the money.
  • If you’ve been at it long enough, you have history to look back at and see how you came out of similar events in the past. You can find some comfort in knowing this has happened to you before and you are still better off now than you were then.

In the end you must do what you think is best for your situation. You may feel comfortable going it alone or you may want expert advice when it comes to your investments in the market. Either way,  I certainly encourage everyone to buy low and sell high, no matter what you’re buying and selling.

 

 

 

 

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

 

Got my tax refund, but is that a good thing?

I’m feeling super proud of myself for getting my taxes done early this year. We also got a nice refund this year. But is that a good thing?

There are two schools of thought on this subject that we’ll explore.

The first is that tax refunds are bad because it means you overpaid your taxes. The bigger the refund to more you overpaid. Basically, you gave Uncle Sam an interest free loan that he repays through your refund. This school of thought is based on the idea that you can make better use of the money whether that includes saving it or investing it. It makes sense and reminds me of something my dad used to tell me, “No one cares more about your money than you do.” I consider myself fairly good with money (thanks to my parents) and so I know from a rational standpoint I should work to minimize my refund and keep more my money in each paycheck. I already save for my property taxes so I’ve proven to myself that I can do it.

Which brings us to the second school of thought which is less about actual rational thought and more about a gut reaction. If I’m completely honest this is where I find myself. One year in my early career I had to write that check to Uncle Sam that put me into this school of thought. Even now I can remember the gut punch of owing taxes and I swore it would never happen again. It’s all about the feeling. A tax refund feels like a unexpected windfall which is the exact opposite of the feeling you get writing the check to send off with your return.

It’s too late for last year but maybe I’ll revisit this issue with my own taxes and take the emotion out of it and make a strictly rational decision.

In the meantime, I’ve got plans to enjoy the money from my refund.

 

 

 

 

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

 

Travel back in time with an IRA

Ever thought about how cool time travel would be? You could go back and right wrongs and take care of all the things you should have done. Well, as we all know, time travel does not exist, but you can travel back at least one year with an Individual Retirement Account. You have until April 15th to do something you told yourself you would do last year — open and/or contribute to an IRA.

So while you may feel like you are five years too late in starting your retirement saving, you’ve been given a chance to not make it 6 years too late by still having time to open and fully fund an IRA for 2019 in 2020 as long as you do it before April 15th.

Now that you’ve decided to take advantage of this unique time travel opportunity, you’ll need to decide on the type of IRA you want. Do you want a Roth or Traditional IRA. Here’s a quick side by side just to whet your appetite:

Traditional IRA Roth IRA
Contributions may be tax deductible Pay taxes on contributions
Withdrawals are taxed as income Withdrawals are tax free
No income limits to make contributions Income limits to make contributions
Required minimum distributions at 70 1/2 No required distributions

Please research or consult with professionals to determine which option works best for you. For example, we can’t provide you with any tax advice and if that is one of your main decision drivers, you’ll need to ask a tax professional.

Once you’ve decided on the type of IRA that’s best for you, you’ll have to decide on your risk tolerance and overall strategy. Are you early career and looking for substantial growth or are you mid to late career and looking to protect the saving you’ve already built up? Again, if you wish to tie your IRA to the stock market, you’ll need to consult with a professional. If you are looking for a safe, guaranteed place to grow your IRA, we’ve got good options for you, especially with our Premium Market IRA.

Since you are reading this, you are at least showing interest in IRAs so now I encourage you to do your own research and take action.

 

 

 

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

Should you purchase travel insurance?

You’ve booked that vacation you’ve been dreaming about for years, and then you are asked if you want to purchase optional travel insurance. My standard answer used to be “no thanks,” but then my life circumstances changed, and I gave the topic more thought. We booked a trip recently and decided for this trip to pay for the insurance because my father-in-law was ill. He passed away right before the trip so we had the ability to cancel the trip and be reimbursed for the entire trip amount.

Like most insurances, you hope you never have to use it. In the case of travel insurance, it is especially true because it usually means something bad has happened on your trip or before your trip preventing you from going.  Either way, it ruins a vacation. The most common types of travel insurance are medical related and trip cancellation policies.

So when I was asked about travel insurance by a coworker after he booked his honeymoon, my first inclination was to answer no but I paused and thought about recent events and gave him the reasons why he may or may not want to consider it:

  • Health. The overall health of those who are travelling and those loved ones who’s passing would cause you to cancel your vacation. Given recent events, it is worth considering if the types of health risks you might encounter at your vacation destination.
  • Non-refundable. What portion of your travel is non-refundable? The higher the percentage or amount, the more you may want to consider a trip cancellation policy.
  • Existing coverages.  Before you travel, check with your health insurance provider to see what coverage you have based on where you are travelling. Some credit cards may have travel benefits such as medical if you used the card to purchase the travel.

If you do consider this type of insurance, make sure you are getting the coverages you feel will give you the most peace of mind. You don’t have to buy this type of coverage at the time you book your trip so you have the opportunity to shop around to make sure you get the price and coverage combination you need.

UPDATE: Happy to announce that my coworker was married in a beautiful ceremony. He did get the travel insurance and was able to cancel the trip he booked due to travel concerns and getting stuck in a foreign country.

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

 

Welcome to adulthood & so many credit card offers

High school graduation season is coming up and it marks the beginning of adulthood for many young people. I was in no way ready to make financial decisions like getting a credit card when I graduated from high school. I didn’t even seek one out, but the credit card companies found me. Not sure if I took the first one or not but I do remember it had a $1,000 limit – I didn’t have to show income of any kind, just sign on the dotted line. I remember I had friends at college who had more than one credit card with total limits over $5,000. This was a long time ago and I can only imagine how many more offers today’s college students receive. The credit card companies were willing to take a chance on me just because I was enrolled in college and that I might have a good job some day and their card would remain the one I use. My parents and I never discussed credit cards so I went into it blind and seemingly willing to learn lessons the hard way.credit card with graduation cap

And did I learn a hard lesson. Before I knew it, I had maxed out the card. Didn’t really have much to show for it other than a pretty cool stereo. The credit card company sent a bill and I realized that now they expected me to pay. I’ll never forget the feeling of being overwhelmed by that realization. Luckily my wife to be was able to help me get a job working at a day care. All of the money I earned went towards paying off that credit card. All of the money my wife made went into her pocket. She too had a credit card but it was a card from her credit union that her dad sent her to college with and gave her clear instruction on what it was and how it should be used (for emergencies only).

I never forgot that lesson (if I’m completely honest I think I maxed it out three times before I truly got it) and for the most part in our early marriage preferred debit to credit. Now that I’m adulting I have a good grasp on using our credit cards wisely and I think I’ll do like my father in law and be proactive with my daughter when she heads off to school. If I don’t, I have a good idea of what could happen – she is my daughter after all. So my advice to all the parents out there – don’t let the credit card companies be the first to talk to your kids about credit cards.

The lessons learned:

  • If you don’t talk to your soon to be adults about borrowing, in this case, credit cards, then someone else will. Most likely it will be someone selling them on the idea of their first credit card or loan. Consider cosigning with them on their first credit card with a lower limit so you can be a part of the process.
  • If you can’t handle a credit card, keep it at home when you are out and only take your debit card to reduce impulse control. It would have saved me while I was in college – I don’t even have that stereo anymore.
  • If used correctly, credit cards can be an important part of a person’s financial life. So many rewards cards incentivize usage and I’ve been able to pay for airline tickets, cruises and other big ticket items with points from reward cards.

 

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

Are you under insured?

Umbrella and riskThe credit union gave away umbrellas at the annual meeting to members who attended. Every time I see an umbrella it reminds me of when my mother asked if I had an umbrella policy because we had been in an at fault accident. I did not and found out the hard way that I was underinsured when it came to my auto insurance.  She made it sound like an umbrella policy was common knowledge and was surprised to find out I did not have one.

I won’t go into details on the accident but there was a serious injury to the other party and there was no way that the liability insurance I had was going to cover all the medical expenses. In this world of being able to purchase everything online in a self-service environment, I had chosen solely on price due to my limited understanding of insurance. You see, I should have shopped based on need and not price. The insurance I needed in my 40s was vastly different from the insurance I needed in my 30s.

In retrospect, I wish I had discussed my changing insurance needs with my parents or a professional insurance agent. The old adage that you get what you pay for certainly applies to insurance. I’m not talking about the quality of the carrier but the level of the coverage. I learned the hard way that insurance is one of those things that you don’t know you didn’t get enough until you need it.

Now that the credit union owns an insurance agency, I’ve learned more about how the insurance I used to take for granted works. Hopefully you can learn some of the lessons that I learned without the stress and anxiety that I experienced. Here are those lessons:

  1. Insurance is for worst case scenarios and you should purchase at levels that protect you in those worst-case scenarios.
  2. Your insurance needs will change throughout your life and you should revisit your coverages periodically to make sure they are still sufficient.
  3. Insurance is a peace of mind product that you should hope you don’t have to use. The more coverage you have, the more peace of mind you’ll have.
  4. Talk with friends, family or a trusted insurance agent about your options and what each coverage means. Remember, my mom was surprised I didn’t have an umbrella policy but she’d never discussed it with me. I didn’t know what I didn’t know.

The best time to review your insurance coverage is before you need it. I encourage you to review your coverages and ask questions. I wish I had done it. If you don’t have a trusted source for insurance questions, please reach out to:

 

 

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

If it sounds too good to be true….

Recently, we’ve received a lot of calls and emails about receiving one of our cashier’s checks for payment of a new online job, for a purchase of an item being sold online,  or __________________ (fill in the blank with other reason). These calls and emails are coming from all over the country. The problem is the checks are counterfeits and depositing one of these will result in the person who deposited it being responsible for the funds.

These scams are so common now that the FTC has an entire website dedicated to the topic. If not our checks, it could be any of the over 10,000 other financial institutions in the US. The check is not really the point as it is just the tool used by the scammers to defraud unsuspecting individuals and with technology being what it is these days, the fraudulent checks are difficult to detect on look and feel alone.

Most of these scams could be avoided by listening to the little voice that tells us that something isn’t quite right. The old saying “if it sounds too good to be true, then it probably is” applies in these situations. When was the last time you paid for an item you bought and wrote the check out for hundreds if not thousands more and asked that the seller then send you the difference via wire transfer or via an app?

We encourage our members and anyone receiving a questionable payment with one of our checks to contact us if they want to verify that a payment is legitimate. We want to help protect our members and the community at large from these scammers.

 

Post author: Jamieson Mackay, CCUFC

The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.

2020 Changes to Inherited IRA Rules

Washington was busy this holiday season. As many of us were looking forward to some well-earned time off, new legislation was passed, and it affects some of the old rules for traditional Individual Retirement Accounts. These changes went into effect on January 1, 2020.

One of the biggest changes will affect the required minimum distribution (RMD) timeline for IRAs granted to a beneficiary at the time of your death.

So, what does this mean for you? Unless an inherited IRA meets a very specific set of circumstances, non-spousal beneficiary is now required to withdraw the money from the IRA within a period of 10 years.

For example, let’s say that you have a hypothetical $1 million IRA. The beneficiary is not required to take a set amount. The requirement is the money must be withdrawn by the end of the 10th year following the year of inheritance. So, if you are leaving your IRA to a 50-year-old child, they must take all the money by the time they reach age 61. In the past, your 50-year-old child could stretch the money over their expected lifetime, or roughly 30 years.

The new limits on IRAs may force account owners to reconsider inheritance strategies and review how the accelerated income may affect a beneficiary’s tax situation.

Individual situations may change and vary. I’m here for you to talk about how this new law changes your retirement strategy. Give Paul Carroll, Financial Advisor, a call, to find some quality time to discuss these updates, and in the meantime, we’ll be keeping a close watch on any other pending changes.

Paul Carroll, CWS®, AAMS®
Financial Advisor
281.925.4140
Paul.Carroll@swbc.com

Securities offered through SWBC Investments Services, LLC, a registered broker/dealer. Member SIPC & FINRA. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor. SWBC Investment Services, LLC and SWBC Investment Company are not affiliated with this institution. FUNDS SHOULD NOT BE CONSIDERED A DEPOSIT OF INSTITUTION, ARE NOT OBLIGATIONS OF, OR GUARANTEED BY THIS INSTITUTION OR ANY OF ITS AFFILIATED ENTITIES, MAY LOSE VALUE, AND ARE NOT NCUSIF INSURED.

This material was prepared by MarketingPro, Inc. for use by Paul Carroll, CWS®, AAMS®.