Online Banking: Integrate online services into your business bookkeeping

Banking online has become extremely popular for personal use, but businesses of all sizes may have even more to gain from online banking services:

  •  Save time. Eliminate time-consuming trips to the bank and schedule/pay bills quickly and efficiently. Plus, 24/7 access means you don’t have to get to the bank before it closes.
  •  Stay organized. File and track financial information electronically.
  •  Get convenient access. Enjoy immediate access to vital financial information.
  •  Go green/eliminate wasted paper. Go as paperless as possible to save money and the environment.
  •  Improve security. Paper copies travel through much less secure routes with an increased chance of getting lost or stolen. In addition to sophisticated online security systems, businesses can monitor accounts online easily and can set alerts for unusual activity or low balances.
  •  Manage cash flow. Built-in reporting helps you easily monitor and analyze income, expenses, current balances, and real-time cash flow.

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Getting Started

The right tools not only make any job easier, they should also produce a better result. Online banking tools are no different. Our website redesign is focused on bringing you the right tools in an easy-to-use format that are intended to help you do your job better.

If you’ve never banked online before, here are some basic tools to help you get your feet wet:

1. eStatements allow you get rid of the paper clutter and receive your statements electronically each month. You can view information online or download eStatements to save and file on your computer.

To get started: Click BANKING LOGIN on any page on the State Bank of Cross Plains website. Either login or click on ENROLL along the bottom of the box. Once you are logged into your business account, click on ADD eSTATEMENTS. Complete the enrollment form. At this point you can view your account activity at any time and will receive automatic email notifications when your eStatement is available each month.

2. My $ – Money Manager is a finance management tool that provides a place for you to collect account data for all your different types of accounts whether they are housed at SBCP or elsewhere. Pull your corporate credit cards, investment accounts, mortgage, insurance, and retirement accounts into one interface to track progress, plan your portfolio, and analyze information for budgeting and cash flow.

To get started: Log into ONLINE BANKING and select BUDGET from the home screen. Once enrolled, simply select ADD ACCOUNTS to begin collecting account data in one location.

3.  Bill Pay enables you to store information about regular vendors in your online account so that paying an invoice comes down to entering the amount and choosing the date to send payment. That’s it. The money is either sent by check or transferred wirelessly. You can even schedule regular payments – such as utilities – so they get paid automatically each month. Efficiency at its best!

 To get started: This one might be the easiest of all. Once you’ve logged into your business account click on the BILL PAY tab.

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Getting Help

Not tech savvy? No worries. Call our Business Online Services number at (855) 256-7328 for information or assistance. You can also visit our Frequently Asked Questions page. We’re here to help.

These are just a few of the basic tools to get you started. Visit with our VP-Treasury Management for a personalized review of how to integrate our full array of online banking tools into your business. You can reach us at (855) 256-7328.

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The Importance of Asset Allocation: Finding the Right Investment Mix for Your Account

2013 has been an excellent year so far for investors, with the S&P 500 up over 23% and the Dow Jones up nearly 19% as of the end of October. Despite this outstanding performance, we have also seen periods of significant volatility this year and over the past several years since the beginning of the “Great Recession.” Most recently, the government shutdown, talk of an end of the Federal Reserve’s stimulus program, and concern about rising interest rates have caused volatility in both the equity and bond markets during the past few months. These periods of volatility can cause significant concern in investors, and highlight the importance of a basic investing concept: Asset Allocation.

Asset Allocation is the mix of stocks, bonds, and cash equivalents in an investment account. The mix is determined through an evaluation of an investor’s goals, tolerance for risk, and investment time length. The goal of the process is to determine the appropriate percentage to be allocated to each of these asset classes to balance the amount of risk that an investor is willing to take with the return potential of the portfolio.

More simply stated, an investor’s asset allocation should provide the investor with an investment mix that provides investment returns with a level of risk and fluctuation that you are comfortable with. For example, an investor who is uncomfortable with large declines in their portfolio’s value should have an allocation with a significant percentage of investments in less-volatile bond investments rather than the more risky and volatile equity investments. Alternately, an investor who is comfortable with such fluctuations may have a larger allocation to stocks in their accounts.

Having the proper asset allocation in your accounts can provide some peace of mind for you as an investor. If your investment mix provides returns with fluctuations that you are comfortable with, you should have less concern during short-term periods of volatility that are almost certain to happen over the course of a year.

If you are unsure about what the right asset mix is in your own accounts or if you have been uncomfortable with the up and down volatility in your portfolio when you’ve opened your account statements this year, it is a good idea to discuss this concept with your Wealth Manager or Financial Advisor. Year-end is a good time to review your goals and investment mix to ensure that your current portfolio is right for you.

Successfully Transferring Wealth to the Next Generation

You’ve tirelessly worked and sacrificed to care for your family and accumulate wealth.  Now comes the hardest part:  successfully transferring that wealth to future generations.  It’s hardest, because a successful transfer involves much more than a smartly designed estate plan. 

 So…how will your children handle their inheritance?  Will they use it to enhance their financial and personal circumstances, or will it dissipate along with their work ethic and sense of personal responsibility?

 Not sure?  The statistics are grim!  They suggest that seventy percent of heirs will lose their entire inheritance within a few years, often destroying family harmony in the process.  Additionally, ninety percent will abandon their parents’ advisory team shortly after receiving their inheritance. 

 Why does this happen?  The answer is simple:  many families fail to plan for the conservation, growth, and transfer of wealth. 

 Here are several things you can do right now to help ensure that your children appreciate and appropriately utilize the fruits of your labor.

 1.  Educate your children.  This means formally teaching them about the responsibilities associated with an inheritance and instilling a commitment to respect and preserve all aspects of your family’s legacy.  This process should begin during early childhood and become more specific as they mature.

 2.  Never underestimate the value of asset protection!  Nasty “stuff” happens…even in the best of families.  Adult children are often confronted with creditors, problematic spouses, spendthrift lifestyles, and the challenges of substance abuse. The solution?  Leave a portion of your estate in a flexible, long-term trust.  This will allow your family to enjoy the benefits of their inheritance while protecting them from the afore-mentioned dangers.

 3.  Protect young heirs…from themselves.  The number one mistake made by most heirs is spending heavily and quickly.  Young adults need time to emotionally mature, establish their careers, develop sound financial habits, and…understand the value of living below their means.  Once again, a long-term trust with flexible distribution standards provides opportunity for heirs to mature before having unrestricted access to their full inheritance. 

 4.  Teach your heirs about the value of trusted advisors.  Heirs often try to manage their own investments.  They take more risk, since they didn’t earn the money.  This often leads to poor investment choices, strategies that expose them to undue volatility, or unscrupulous advisors.  Make sure that they have a relationship with your family’s advisors (wealth manager, attorney, insurance specialist, CPA, etc.). 

 Remember – your heirs are the stewards of your family’s legacy!  Prepare them now, and they will be far more likely to enrich their lives and those of the next generation.

Estate Planning: Moving Beyond the Taxman!

Mention estate planning, and conversations invariably turn to taxes. Thankfully, the American Taxpayer Relief Act of 2012 ushered in several sweeping and permanent changes. 

 For example, the amount exempt from federal estate, gift, and generation-skipping taxes is set at $5 million, indexed for inflation ($10 million for married couples).

 Although taxes are important, there are other equally critical considerations. Here are other estate planning objectives that most of us deeply care about:

  • Care for loved ones,
  • Pass on your legacy,
  • Avoid probate and intestacy,
  • Plan for disability, and
  • Peace of mind.

 Not sure if your current estate plan addresses these objectives?  Ask yourself these questions:

  • Who will receive my (family) assets?  When?  How?
  • Will my children share equally?
  • How can I shield my child from a financially predatory spouse?
  • How can I provide for a child with substance abuse issues?
  • Should I provide for grandchildren?  How?
  • How can I ensure that an inheritance is a financial legacy rather than a short-term windfall?
  • Who will care for me and my spouse if I/we become disabled?  How have I ensured this?
  • Can my business remain in the family?
  • How will successor management be identified and developed?
  • How can I fairly treat my children who do not participate in the family business?

These are important objectives and questions.  If you can’t answer these questions or don’t like the answers, it’s time to seriously review your estate plan.  Our Trust Officers will be pleased to discuss these matters with you, keeping in mind that you should always consult with an experienced estate planning attorney before finalizing your plan. 

 

 

You, The Deficit, and Medicare Costs: Serious Stuff!

The anticipated growth of Medicare costs is the largest contributor to our country’s long-term budget deficit issues.  Few of us will pay sufficient taxes and premiums to cover our eventual Medicare costs. 

All of this spells big trouble.  Here’s a quick Medicare primer that explains why.

Is Medicare truly a bigger long-term problem than Social Security or defense spending?   Yes!  The Congressional Budget Office projects that Medicare spending will rise to 6.7% of Gross Domestic Product (GDP) over the next 25 years…from 3.7% this year.  Some believe that is a conservative estimate.

Why is Medicare so problematic?  While rising Social Security costs are driven primarily by the ‘number’ of elderly people, Medicare costs are driven by two factors:  the number of elderly AND rapidly rising medical costs. 

Don’t most Americans cover their Medicare expenses via payroll taxes during their working lives?  Not even close!  According to a study by the Urban Institute, a married couple (both 66) with average earnings will pay roughly $122,000 in dedicated Medicare taxes through the payroll tax (including their employers’ share).  That couple is likely to receive nearly $390,000 in benefits, adjusted for inflation, during their lifetimes.

 Why are healthcare costs rising so quickly?  This is a “Good News/Bad News” story.  The good news is that our medical system has developed more sophisticated and successful means of treating serious illnesses like cancer, heart disease, and other maladies.  These means are expensive!  The bad news is that our system wastes enormous sums of money without enough bang for the buck.  Countries like Canada, Britain, Australia, Germany, France, and Japan all enjoy higher life expectancies…while spending less per capita!

 What are possible solutions?  Here’s where it gets complicated.  We could pay more in taxes;  however, higher taxes alone will not suffice unless the increases are much higher than anything currently being debated.  Other options include raising the eligibility age, more competition, restricting payments on treatments not proven to be more effective than less costly alternatives, and reducing benefits for the affluent. 

 Fixing Medicare will not be easy!  Let’s hope that Congress and the President take seriously every budget negotiation as an opportunity to fix a problem that promises to get much worse over time!

 

 

2013 IRA Contribution Limit Increase

Tax day is rapidly approaching, and April 15th also marks the last day that an IRA contribution can be made for the 2012 tax year. If a taxpayer wishes to make both their 2012 and 2013 contributions prior to this date, it may be helpful to briefly review the 2012 IRA limits and the new changes for 2013.

The contribution limit for IRA accounts for 2012 contributions is $5,000 for taxpayers under 50 years of age, and $6,000 for those that are age 50 and older. These amounts increased slightly for 2013 contributions to $5,500 and $6,500, respectively.

Contribution limits for qualified retirement plans such as 401(k) or 403(b) plans also increased slightly for 2013, with those below age 50 allowed to contribute $17,500 and those over age 50 able to contribute $23,000. SIMPLE IRA plan participants are allowed to contribute up to $12,000 and $14,500, respectively.

Please contact your Wealth Manager, Financial Advisor, or tax advisor for further information on the contribution limits and income restrictions for IRA accounts in 2013.

The Sequester and Beyond

February was generally a good month for the markets, with most U.S. markets adding to their existing gains so far in 2013. Bond markets ticked upward and erased a substantial portion of the small losses incurred in January. The Dow Jones finally reached the 14,000 mark once again and flirted with all-time high levels that were reached prior to the ‘Great Recession.’

Despite these positives, the more concerning news item is the lack of a deal to avoid the automatic spending cuts brought on by reaching the extended ‘fiscal cliff’ deadline. Passing the deadline without a deal means the implementation of the ‘sequester cuts’ that reduce spending for national defense, Medicare, and other Federal budget items. Though the overall amount of the cuts of $85 billion is small relative to the $3.55 trillion Federal budget, the continued partisanship and unwillingness to negotiate is the more problematic issue. Another deadline is looming at the end of March, when lawmakers have until March 27 to reach a deal to authorize funding to keep the government funded and running for the rest of the year.

The good news is that the markets have generally shrugged off this missed deadline. Market momentum has continued upward and the Dow reached a new all-time high in early March. Some economists feel that the economy and markets will strengthen further once we have passed all of the self-made deadlines in Washington on the various budget and fiscal policy issues that are currently up for debate. The sequester cuts may have a slowing effect on the already fragile economic recovery, but there are expectations for some strengthening in the second half of the year. Passing each of these deadlines in Washington removes some uncertainty from the markets, and that typically leads to good market performance.

That does not necessarily mean that we are in the clear when we finally pass all of these deadlines, as persistently high unemployment remains a concern and corporate earnings continue to be mixed. The Federal Reserve has already sparked some concern that their latest stimulus program might not last as long as previously anticipated, which could be problematic if inflation increases before a there is a substantial decline in unemployment.

Despite these concerns, if Congress and the President can reach a deal prior to the next fiscal deadline, the certainty provided by a deal could provide some momentum that bolsters market returns and hopefully leads to a strengthening economic recovery as we move through the rest of 2013.