6 Financial Tips for Service Members and Their Families

Monday, June 26 at 09:15 AM
Category: Personal Finance
Finances are often identified by service members and their families as one of their most significant stressors – even more than deployments and personal relationships. Financial concerns at home make it extremely difficult for service members to focus on the mission at hand. Planning ahead as much as possible is key for the millions of military families who face unique financial challenges like deployments and relocations.

These financial tips can help lessen the financial burden on military families:
  • Contribute automatically to a Thrift Savings Plan. Military members have access to the Federal Thrift Savings Program, which offers the lowest-cost retirement savings plan available. Have automatic contributions withdrawn from your paycheck. 
  • Plan for deployment. Before deployment, have a family conversation about managing the household budget. Military personnel also receive additional funds while deployed. Decide on the best use for that extra cash, whether it is paying off debt or increasing Thrift Savings Plan contributions. 
  • Meet with your banker before active duty. The Servicemembers Civil Relief Act offers all military personnel entering active duty a variety of financial protections. The SCRA covers issues ranging from interest rate reductions to limits on debt accrual. Ask your banker about the key provisions of this law and how they can help you.  
  • Set up automatic bill pay. Whether you’re stationed stateside or overseas, automatic bill pay will give you and your family one less thing to worry about each month. It can be particularly helpful during deployments in regions where internet access is unreliable and mobile banking isn’t an option.
  • Consider housing options. With mortgage rates at notably low levels, homeownership may seem like a no-brainer. However, service members should consider their options. Frequent relocations and deployments can make owning a home challenging and expensive. Renting may be a smart option for short-term assignments. Decide what’s best for your family and your finances. 
  • Consult a financial advisor. Schedule a visit at a Personal Financial Management Program (PFMP) office, located in your military and family support centers. They offer free one-on-one counseling, as well as other financial education resources. 
Service members juggle a lot of stresses, and we hope to reduce the financial stresses with these tips.
 
Information courtesy of American Bankers Association. 

Tags: Financial Education, Home Loans, Mortgage, Retirement, Savings
 

Join Us for Lobby Chats Fridays in June/July in Joplin, Mo.

Friday, June 16 at 06:10 AM
Category: Arvest Community News
Retirement planning is an ongoing process of preparing for and reacting to critical financial events. Critical financial events can be as diverse as retiring, a change in career path or just getting started. The right strategy for each stage is the key to success. 
 
Join us at noon for lobby chat round-ups on June 23, June 30 and July 7 at 3201 McClelland Blvd. Joplin, Mo., with our very own expert, Garrett Taylor**, client advisor for Arvest Wealth Management. He will share some basic insights on strategies to save, make time for Q&A and schedule follow-up appointments upon request. 
 
In his role, Garrett assists clients in the Joplin, Mo., area with investment advice, retirement planning, risk management and other areas of personal financial planning. Prior to joining Arvest in 2012, Garrett earned a degree in finance and economics from Missouri Southern State University in 2006. In 2009, he earned the CERTIFIED FINANCIAL PLANNER™ certification. Garrett is also a member of the Greater Kansas City chapter of the Financial Planning Association. Garrett also serves on the board of the Joplin Community Health Clinic. 
 
Garrett Taylor can be reached at (417) 627-8156 or gtaylor@arvest.com
 
**Missouri Insurance License # 375253 

Investments and Insurance Products: Not a Deposit | Not Guaranteed by the Bank or its Affiliates | Not FDIC Insured | Not Insured by Any Federal Government Agency | May Go Down in Value
Investment products and services are provided by Arvest Investments, Inc., doing business as Arvest Wealth Management, member FINRA/SIPC, an SEC registered investment adviser and a subsidiary of Arvest Bank. 

Insurance products are made available through Arvest Insurance, Inc., which is registered as an insurance agency. Insurance products are marketed through Arvest Insurance, Inc., but are underwritten by unaffiliated insurance companies.
 
Trust services are provided by Arvest Bank. 

Tags: Joplin, Missouri, Retirement
 

Tom Clancy’s Widow Wins Her Court Battle

Wednesday, June 14 at 02:05 PM
Category: Personal Finance
The estate plan of noted author Tom Clancy had three equal trusts, one for the children of his first marriage, a marital trust for his surviving second wife, and a family trust for the second wife and the daughter they had together. The trusts were funded from the residuary estate (whatever is left after paying expenses and any specific bequests), and Clancy’s will also called for estate and/or inheritance taxes to be paid from that same remaining fund. The personal representative of the estate (who also had drafted the will) proposed to pay half of the federal estate taxes due on Clancy’s $83 million estate from the trust for the adult children, the other half from the family trust. The taxes came to roughly $15 million. 

Mrs. Clancy objected. Before his death, Clancy had executed a codicil to his will, to clarify that he intended both the family trust and the marital trust to qualify for the federal estate tax marital deduction. That suggests that the trusts for Mrs. Clancy should not be tapped to pay taxes, because assets that don’t share in the creation of the estate tax burden should not have to pay those estate taxes. To the extent that the widow’s share is used to pay the estate tax, the marital deduction must be reduced, which means still more estate tax, and a further reduction in deduction, and yet more taxes, in an extended circular computation. In fact, if Mrs. Clancy’s share is free from the tax burden, the actual estate tax due will drop by nearly a third, to roughly $11 million. 
 
That’s what the probate court decided was proper, it’s what Clancy apparently intended with his codicil to the will. In a 4-3 decision, the Maryland Court of Appeals agreed with that conclusion in August. A savings clause in the codicil “explicitly directs that the personal representative not act to adversely impact the benefit of the marital deduction of the marital trust and the family trust.” Three dissenters believed that Clancy probably did not appreciate just how much that seemingly minor savings clause would upend the overall result of his estate plan. 
 
The result is decidedly unequal for the five children. The child from the second marriage will get roughly one-third of the estate, undiminished by taxes. The share for the other four will be reduced roughly 40% for taxes, and then split four ways among them. Whether Mr. Clancy expected an outcome for his estate plan to have as many twists and turns as the plots of the books that he wrote remains an open question. 
 
(December 2016) © 2016 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

The Retirement “Tryout”

Tuesday, June 13 at 01:40 PM
Category: Personal Finance
Retirement is sometimes defined in terms of what one is leaving behind — a career, difficult clients, job stress, the daily commute, the grind. But for retirement to be fully satisfying, according to many experts, one needs to retire to something, not just from something. Defining that “to” and giving it a tryout is what we mean by “pretesting” your retirement. Here are some examples. 
 
Donate your time and expertise. An attorney acquaintance of ours spent most of his career as in-house counsel for a major oil company. As he approached his retirement years, he arranged to be allowed to do pro bono legal work for immigrants. He found the experience so rewarding that after he started drawing his oil company pension, he founded a law firm specializing in such pro bono work. 
 
The “soft launch” of a retirement consultancy. Another acquaintance thought his years of experience in the banking business might be valuable in creating a marketing consultancy for financial services firms. Before he retired, this person tried out some of his ideas with the advertising agency that his bank used. Both sides found the experience valuable, and a basis was created for the individual’s new marketing firm. He was able to have a clear financial path to follow once his regular full-time employment ended. 
 
Try a month’s vacation. It would be a shame to retire to a quiet, secluded lifestyle, only to find it boring after a few months. Many retirees report that they miss the camaraderie of their working lives after they retire. Before deciding upon retirement relocation, it can be helpful to spend an extended period of time in the possible new location, to see what day-to-day life would be like there. 
 
As you conduct these tryouts, you should monitor your finances, noting any adjustments that may be required. You may find that your spending needs change or vary from your expectations, and that may influence your choice of a retirement start date. 
 
Testing the water early can head off unpleasant surprises after one enters retirement. By then, many decisions have become irreversible. If you’d like a professional review of your financial readiness for retirement, we’d be pleased to give you our evaluation. 
 
(January 2017) © 2017 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

Don’t Let a College Savings Plan Crack Your Retirement Nest Egg

Wednesday, January 18 at 09:15 AM
Category: Personal Finance

Balancing saving for retirement and saving for your child's college can be tricky. Here are some tips to help you manage both at the same time.

LOWELL, Ark.  Two of the largest savings plans consumers need to fund and manage in their lifetime are saving for their child’s college and for their personal retirement. These are plans that take time to adequately build, but one doesn’t have to negate the other. Both can be managed successfully and simultaneously through early planning.

“Above all, start saving for both as soon as possible,” said Donny Rogers, President of Arvest Bank Trust. “From the moment you get your first job to the moment you learn you’re going to be a parent, set aside money and let it grow.”

Rogers says the balancing act begins with determining how much of the college expense parents want to fund and what other big-ticket expenses they may also cover for their children. 

“It’s smart to focus on saving for college, but the reality is that there are a few other large expenses that require long-term budgeting,” Rogers said. “If you plan on buying your teenager their first car or paying for a daughter’s wedding, you need to factor those expenses into your budget so you segment your savings plans across the board. I always tell parents that it’s fair to require some ‘sweat equity’ from their kids so they contribute to the expense of paying for a car or shouldering a portion of any student loans. There’s no expectation that parents pay 100 percent of all of those expenses.”

A 529 Plan offers a tax-free savings option for college that is specifically earmarked for post-secondary education. These state-specific plans have different rules of engagement but typically can be used to fund expenses from tuition to housing to other necessary items for school. Significant supplemental funding is also available in the form of academic, athletic and arts scholarships.  

While you can borrow for college expenses, you can’t do the same for retirement savings. Therefore, it’s critical to begin saving early for your retirement nest egg and to budget in parallel with other savings priorities. Maximizing an employer’s 401(k) matching option puts “free money” in your account. In the event you need to adjust your savings more heavily toward college, be sure not to reduce your retirement savings below the level of employer matching. It’s recommended that 10 percent of your income be allocated toward retirement every year.

“Regardless of how well you plan, there will inevitably be change and the need for adjustments along the way, and that’s perfectly normal,” Rogers said. “Consistency will reward your efforts when you need to utilize those funds.”

The so-called “catch-up plan” that allows individuals age 50 and over to make extra contributions can help consumers make up for lost ground during the saving process, once college and major expenses have been paid for, but Rogers advises customers not to lean too heavily on that option. He says the number of variables involved in retirement planning can sometimes cause consumers to miss significant savings. Those may include the length of time one plans to work, or is able to work; the kind of lifestyle one wants to lead after retirement; the security of their career and other potential factors or risks.

In addition, the rate of inflation and the rising cost of college tuition will affect how much of an impact savings for college and retirement have on the larger family budget, making that early foundation and steady savings plan even more important in the long run.

Tags: College, Financial Education, Press Release, Retirement, Savings

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