That’s an IRA, or Individual Retirement Account: a personal savings plan that allows you to save money tax free. Unlike a 401(k) plan, which is sponsored by your employer, you can open an IRA yourself.
There are several types of IRAs so you’ll want to look at all of them and determine the best one for you as an individual, self-employed person or small business owner. They’ll differ in terms of:
Eligibility requirements (income and employment)
The amount you can contribute
Penalties you could incur if you withdraw before the retirement date
If you think of an IRA as a basket that holds your investments of stocks, bonds and cash, all the income from interest, dividends and capital gains on those investments grows tax free.
You’ll also escape taxes either on the money you put into the plan initially, or the money you withdraw in retirement, depending upon whether you chose a traditional or a Roth IRA.
If you already have an IRA, you have until Tuesday, April 15, to make a contribution for the previous year. If you don’t have one, consider opening one day. It’s a great way to save for retirement!
Did you know that billions of dollars in savings bonds have stopped earning interest, but haven’t been cashed? It’s time to look and see if you – or someone you gifted — have those bonds and cash them or, better yet, reinvest the funds.
Home prices in Southeast Michigan are up the upswing, just one more indication of our state’s recovering economy.
The median sale price for homes and condos in Wayne, Oakland, Macomb and Livingston Counties was up more than 40% to $120,800 in December 2013, compared to $85,750 in December 2012. The information is compiled by Farmington Hills – based Realcomp, the multiple listings services for Southeast Michigan.
Realcomp captures many home sales in the four-county area but does not include homes for sale by owner or sales handled by agents outside of its network. Continue reading →
Millions of credit and debit cards were compromised at one of the nation’s largest retailers last month. This security breach means thieves could use account information to create new cards and make purchases or even raid people’s checking accounts.
While this is a problem for both cardholders, debit cards are often the bigger targets because they can mean cash, since they’re linked directly to a bank account. Continue reading →
As we welcome in a brand new year, here are seven things you can do now to organize your finances and better prepare for the future.
Plan your estate. At a very minimum, you should have a will that states how your assets will be divided upon your death. You should also have a living will, which details your wishes regarding medical treatment when you are no longer able to express informed consent, and a health care proxy that appoints someone to speak those wishes when you can’t.
Max out your tax-deferred savings accounts. For example, if your employer offers a 401(k) retirement savings plan, be sure you’re taking advantage of it and the matching contributions by contributing the maximum amount to it.
Review your mortgage. Can you refinance at a lower rate and save money?
Set up an emergency savings account. The general rule of thumb is to have enough savings in a liquid account to cover at least six months of living expenses in case something unfortunate happens, like a serious medical condition or the loss of a job.
Consider opening a Health Savings Account (HSA). If you are covered by a high-deductible health plan, an HAS can help you save for future health care expenses.
Start saving now for your child’s college tuition. The Michigan 529 Plan is similar to an IRA or 401(k) and allows families to save for higher education costs tax-free through a variety of investment options.
Help your children learn to save money. It’s never too early to start, and it’s one of the most important habits we can instill in our children.
All of us at Bank of Michigan wish you a happy and healthy 2014!
You may hear about new mortgage regulations taking effect in January 2014, but for the most part they won’t affect us or our customers. That’s because the regulations are designed to prohibit the “exotic” types of mortgages that we never make because they’re generally bad for consumers, such as negative amortization, stated income, and option arm mortgages.
We offer fixed rate and adjustable rate mortgages to help you buy a new or existing home, investment property, second home or parcel of land. In all cases we look at specific financial information to be sure you can afford the property. As you’re preparing to apply for a mortgage, be sure to compile: Continue reading →
Loan growth at small community banks was up more than 6% in the second quarter of 2013, far outpacing the 2% growth reported by the top 25 largest banks in the country, according to research by Keefe, Bruyette & Woods Inc.
Why are more people and businesses turning to small community banks? We have a different mindset than the big banks. We pass on fewer costs to our customers, we’re quicker and more nimble, and we’re a local small business.
We can offer some services with lower fees because we don’t have the huge infrastructure costs of the large banks. Because we’re local, we respond quickly to our customers’ requests and make decisions fast. Our customers will always talk to a person when they call and won’t have to punch a number to find them.
We care deeply about our local community and the people and businesses in it. We get to know our customers and understand their needs, and many times we can do more for them than a big bank.
Like most of our customers we’re a small business too, and we understand what it takes to operate one successfully. We make a point of figuring out solutions to help our small business customers.
Check us out! By banking local, you’ll receive personal customer service to meet your banking needs and you’ll be helping your community be successful.