Investing Insights

It’s never too late to start investing in your future to reach your long-term savings goals. Individual Retirement Accounts (IRAs) are commonly used investment accounts that allow you to put your retirement and your financial future in your own hands. Before picking an IRA to meet your financial goals, consider the following specifications, benefits and potential drawbacks of each type.

Traditional IRAs

Specifications: Traditional IRAs are a way to save pre-tax dollars for retirement. You can contribute up to $5,500 of earned income (up to $6,500 if you are 50 or older) until the age of 70 1/12.

Benefits: Contributions are tax-deductible, depending on income, filing status and whether you or your spouse are covered by a retirement plan at work and whether you receive social security benefits. You are also able to contribute the same amount to your spouse’s IRA. You are able to withdraw funds without penalty beginning at age 59 1/2.

Potential Drawbacks: If funds are withdrawn before the age of 59 1/2, the funds are subject to a 10 percent penalty. Distributions must begin by April 1st of the year following the year you reach age 70 1/2.

Roth IRAs

Specifications: A Roth IRA offers tax-free income in retirement. Anyone with earned income is eligible for a Roth IRA and you are able to invest up to $5,500 of earned income, tax-free (or up to $6,500 if you are over age 50).

Benefits: Roth IRAs allow you more discretion over when you can take distributions from your retirement account than a Traditional IRA. Unlike Traditional IRAs, you are not required to take distributions at age 70 1/2, and you can continue making contributions with earned income at that point. A qualified distribution may be withdrawn tax and penalty free.

Potential Drawbacks: Contributions are not tax-deductible upfront. If funds are withdrawn before the age of 59 1/2, the funds are subject to a 10 percent penalty. Traditional IRAs can generally be converted to Roth IRAs, although tax consequences may apply.

Simple IRAs

Specifications: Small business owners who are not currently sponsoring a retirement plan commonly use Simple IRAs as a start-up savings plan. The employer is required to contribute each year either a matching contribution up to 3 percent of compensation or 2 percent non-elective contribution for each eligible employee. Employees may elect to contribute and are always 100 percent vested. The amount an employee contributes to a Simple IRA cannot exceed $12,000.

Benefits: Simple IRA plans do not have the start-up and operating costs of a conventional retirement plan. There are no filing requirements for the employer.

Potential Drawbacks: The employer cannot have any other retirement plan and there are lower contribution limits than some other retirement plans.

First National Bank wants to help you save for your future. Learn more about our retirement accounts and contact us today to discuss more about which IRA is right for you. Start planning for a secure financial future for you and your family.

The overall annual cost for a college education ranges from about $7,000 for community college to $35,000 for a private school, according to U.S. News & World Report. While investing in your own education or your children’s education is important, it can also be a financial obstacle. The following tips can help lessen the financial burden and lead you down the path of a successful financial future.

1. Start saving early: It’s never too early to start saving for your child’s future education. Start saving at an early age to create a stable foundation for college savings.

2. Open a NEST 529 Direct College Savings Plan: With no minimum contribution amount, simple investment options and low-fees, this savings plan can help you reach your education savings goals.

3. Fill out the FAFSA: All future and current students should fill out the Free Application for Financial Student Aid, regardless of whether or not they plan on taking out loans or grants to help pay for their education. The FAFSA is required to receive federal grants and loans and can help to get free money or low-loans for education expenses.

4. Apply for scholarships: Apply for scholarships to help offset the costs of education since scholarships don’t need to be paid back like loans. There are thousands available with all kinds of criteria, both at the local and national levels, for certain areas of study, ethnicities, locations and even more additional criteria.

5. Find a part-time job: Future college students can contribute to their savings by finding a part-time or summer job and putting away savings for their future education each month. Current college students may qualify for federal and state work-study programs to help supplement their tuition costs.

6. Borrow only what is needed: Borrowing more than you need now will cost you more in the long run.

7. Take classes at your local community college: High school students and first-year college students can save money by taking prerequisites at a local community college at a lower cost than private or state universities.

8. Take advantage of education tax credits: The American Opportunity Credit allows you to claim up to $2,500 per student each year for the first four years the student is working towards his or her degree. The Lifetime Learning Credit allows you to claim up to $2,000 per student each year for any college tuition, fees, books, supplies or equipment that were required for the education received.

9. Apply for multiple schools: Make a list of your top colleges or universities to apply to and carefully examine the costs and financial aid offers before choosing one.

10. Create a budget and stick to it: Keep track of your income and expenses and commit to a budget. Look for expenses that can be cut and continue to contribute to a savings account to help pay for your educational expenses. Healthy spending and saving habits can lead to a secure financial future after college.

If you are contemplating changing jobs in 2014, there are many factors you should consider when making the transition. Maximizing the following financial benefits can help lead to a healthier, more secure financial future for you and your family.

Retirement

Find out when you are eligible to enroll in any retirement plans to ensure you are maximizing your time and contributions. Always confirm if your new employer matches 401(k), IRA or other retirement contributions. Employer contribution is a valuable benefit that you should always take advantage of to help boost your retirement savings. Also, ask about any internal retirement or pension plans that are available.

Direct Deposit

Direct deposit allows employers to electronically pay employees, send expense reimbursements and award bonuses directly to an employee’s bank account. Direct deposit offers many advantages including eliminating paper checks that can be lost or stolen, speedier posting to an employee’s checking account and reducing wait time in lines at the ATM or bank to deposit checks. Set-up direct deposit into your First National Checking Account with no monthly fees, no minimum balance and no strings attached.

Stock Options

Inquire about employee stock purchase plans if your employer is a publicly-owned company. This is a simple, convenient way to purchase stocks at a discounted price. Employees contribute to the plan with an automatic payroll deduction, and, at the end of the offering period, your employer will purchase stocks with the funds.

Tuition Reimbursement

An important financial benefit to take advantage of, if offered by your employer, is tuition reimbursement or assistance. If you are interested in continuing your education, this is a great benefit that can help lift the financial burden of getting an advanced degree. Be sure to ask about requirements and eligible programs to ensure the educational options are benefiting both you and your employer.

For more information and guidance on financial planning and investments, contact First National Investment and Planning Services today.

It’s important to prepare for the unexpected, and life, disability and long-term care insurance can all help you ensure a secure financial future for yourself and your loved ones. Insurance plans can cover unexpected expenses, estate taxes and pay off debts. Consider the following benefits and guidelines when choosing the right plans for you and your family.

Life Insurance

Benefits: Life insurance can help you ensure financial security for your loved ones and help offset the impact of estate taxes upon death. Life insurance can help your family maintain their current lifestyle, continue paying the home mortgage, help pay off debts or estate taxes or go towards future education costs. As long as you pay premiums, permanent life insurance provides coverage throughout your life, regardless of whether your health or personal situations change.

Guidelines: To determine how much life insurance you need, consider what your beneficiaries would need to cover expenses in the event of your death, and also to live comfortably. Keep in mind education and retirement savings. Also, decide if you need permanent or term life insurance. Permanent life insurance offers protection for your entire lifetime while term life insurance offers coverage for a certain time period, from 10 to 30 years. Choose a longer-term policy if you have young children. If your children are adults supporting themselves, a short-term policy may be acceptable.

Disability Insurance

Benefits: If you are unable to work due to an illness or injury, disability insurance can help you maintain your standard of living. It can allow you to continue to pay your expenses, including car and mortgage payments and additional living expenses including food, gas and utilities. It will help replace any income lost while you recover from your illness or injury.

Guidelines: Check with your current employer to see if there is group disability coverage available to you. If you are considering purchasing your own policy, be sure to receive quotes and policies from at least three different insurance companies to compare pricing, coverage and whether the policy is noncancelable or guaranteed renewable. Noncancelable policies are the best option as the insurance company is not able to cancel your policy or change your premiums as long as you are paying your premiums on time. Also, purchasing a policy at a young age can save you money as insurance costs typically rise with age.

Long-Term Care Insurance

Benefits: Long-term care insurance differs from traditional health insurance and is available to help you cover long-term personal and custodial care services and support, whether its in your own home or another facility. Policies can be used to cover daily living expenses such as nursing home or assisted-living services, bathing, dressing or eating. It’s never too early to start planning for your long-term care.

Guidelines: Review the average costs for long-term care to estimate how much coverage you may need on your long-term care insurance policy. Keep in mind that any long-term care insurance policies have limits on how long or how much they will cover. You should designate an individual to be the decision-maker for your long-term care in the event that you are medically or mentally unable to make your own decisions. Consider consulting an eldercare attorney for advice and guidance on selecting the right policy for you and your family.

Investments and Planning Advisors can help you get started today on securing your financial stability for tomorrow and beyond. Learn more about our investment and planning options.

Why saving for college is so important

While almost everyone wants their child to go to college, according to a 2013 study by Sallie Mae, only 38% believe they will save enough. The same study indicates that 54% of middle income families don’t have a plan to save, yet research shows children who have a savings account in their name are seven times more likely to go to college. According to Education Pays 2013, a study by the College Board, the typical bachelor’s degree recipient can expect to earn about 60% more during a 40-year working life than the typical high school graduate earns in the same period, and that gap is widening. This research also shows many other effects a college education can have on the success and happiness of a child in their future. College graduates earn more and have a greater sense of well-being.

The cost of borrowing versus the cost of saving

65% of college graduates have some amount of student loan debt. It is more economical to save for college and have your money work for you by creating earnings rather than paying back interest on a loan. The Sallie Mae study indicates 27% of enrolled families pay for college by taking out parent or student loans and 11% rely on student income and savings.

How much to save

Any time is the right time to begin saving. Even when only investing $100 a month, the earlier you save the more you will have to help pay for college costs. If you start saving when a child is in third grade with $100 a month, earning 5% per year in a 529 account, you might accumulate over $13,000 by the time the child is ready for college, but if you start when the child is newborn, that amount could be over $34,000.

Give a gift that can last a lifetime

Many families are starting a feel-good family gifting tradition. They are opening Section 529 college savings accounts and contributing in a meaningful way – both in an ongoing basis and for special occasions. This doesn’t necessarily mean in place of the beloved doll, truck or gaming system. But, it means keeping these moments in mind as a time to also make a contribution to a college savings account. Think, birthdays, preschool graduation, beginning of Kindergarten, and of course, throughout the holiday season. Every family has different ways they celebrate, and if part of those celebrations includes a gift into a college savings account, they really start to add up. Grandparents, aunts, uncles and important family friends can give the gift that truly will last a lifetime. They can open their own 529 account, or they can contribute to an already established account. It’s never too early or too late to begin saving for college, it’s important to just get started.

NEST 529

First National Bank is the program manager for Nebraska’s 529 Plan, NEST, Nebraska Educational Savings Trust. NEST is consistently recognized as a top-rated plan in the industry and offers easy ways to open and manage accounts online. The plan is open to residents of any U.S. state, even if that home state offers its own plan. When the time comes, the money you’ve invested can be spent at almost any college in the country including private colleges, public universities, community colleges, graduate schools and trade schools and some abroad programs. Investing in NEST 529 offers tax advantages, both now and in the future. Earnings are tax free if used for qualified higher education expenses. And you can take advantage of unique gift and estate tax benefits.

Click here to learn more about NEST College Savings Plans.

An investment planner can help you plan for a successful financial future, and help you prepare for retirement, education, protection and estate planning or for managing mutual funds, stocks & bonds or IRA’s. Whether you need help getting started or guidance on how to manage the investments you already have, a 3rd party evaluation of your situation can help you make the most suitable decisions to stay on track reaching financial independence.

Selecting an Investment Advisor
You may benefit from an investment planner if you have little experience with finances, don’t have an interest in learning the in’s and out’s of investments, or have a complex financial situation. It takes time to plan and manage investment accounts, but it’s important to make the time for it regardless if you seek out a professional planner or not. When selecting an investment advisor, you should ask for his/her main areas of expertise, professional designations, services offered and payment structure. It's important your goals align with the past experience of your planner. No two investment strategies are alike as every investor has his or her own unique goals and plans for the future. First National Investments and Planning advisors will work closely with you to develop a successful, customized investment plan.

Developing Your Plan
Once selecting an investments advisor, you will work closely with him or her to outline your current financial situation to better address your goals. You will need to share certain information; including net worth and earning statements, tax returns and your responsibilities, as well as with the level of risk you're comfortable. You will then discuss what barriers may exist to reaching your goals, such as inflation or taxes. First National Investments and Planning advisors will help you identify these obstacles and find a way to get past them and develop a comprehensive financial plan to reach your goals.

Benefits of an Investment Advisor
By working closely with an investments planner, your plan will be continually monitored as your personal and economic situations change. The best-laid plans can be thrown off course if not monitored on a regular basis. Having an advisor who is aware of your situation and your end goals can help you make revisions to your plan, when needed.

It’s never too early to put a basic estate plan in place. It’s important to ensure your financial goals are met after death and that your loved ones are able to easily access your estate. The following tips will help you get your estate plan started.

• Take Inventory: Examine your current investments, retirement accounts, insurance policies, and any other financial assets you may have. Decide who you would like to handle your financial affairs, and consider someone you not only trust, but someone who has a strong understanding of finance.
• Consult a Professional: It’s important to work closely with a professional who understands the challenges of estate planning and who will help you be able to make sound decisions. With personal involvement and direct access to an array of financial products and services, First National Bank can help you make the best decisions towards securing the financial future of your estate. Contact a First National Investments & Planning financial advisor today at 866-914-4387.
• Be Aware of Tax Laws: The Federal Estate Tax is a tax on your right to transfer your assets after death. Your estate is subject to possible taxes includes cash and securities, real estate, insurance, trusts, annuities, business interests, and other assets. As of 2013, only estates exceeding $5.25 million are subject to the federal tax, according to the IRS. However, it’s important to continually monitor changes to tax law.
• Draft a Will and Possibly a Trust: A will is typically the most common choice for passing on an estate to family or loved ones. Wills detail exactly who will receive each of your assets, and they can be amended at any time. A trust is an extension of your will and allows you to place specific conditions on how your assets are to be distributed and can potentially decrease the amount of gift and estate taxes owed.
• Give Tax-Free Gifts: Current tax law allows you to give up to $14,000 to each individual tax-free. You can also pay tuition or fees for loved ones tax free, as long as the tuition is paid direct to the institution where the payments are due. Also consider donating a portion of your estate to a charitable fund or foundation.
• Revisit your Plan in the Future: Situations and tax laws may change, so it’s important to continually re-evaluate your financial situation and your will to make sure your plan is mutually beneficial for all involved.

Spring is right around the corner, which means it's a perfect time for you to consider increasing the value of your property by adding landscaping. Improving your curb appeal, regardless if your budget is big or small, is an important and easy way to change the appearance and value of your home, both in the short-term and long-term. The following tips for varying budgets will help you improve the look, feel, and value of your home.

Under $500

Update your old house numbers. Consider the style of your house and find either new modern or traditional house numbers to reflect your home's personality. Another cost efficient tip is to pressure wash your siding, driveway, sidewalk and decks. Remove years of dirt and grime to give your home a fresh look. Add some color by buying a gallon of paint and giving your front door and shutters a makeover. Purchase pots and window containers in complementary colors and plant your favorite colorful flowers.

Under $1,000

Remove outdated, damaged or builder-grade lighting by your front door or garage to give your home an instant refresh. Consider replacing old hardware on your front door or garage door to give them an updated look without breaking the bank. Install landscaping lighting to illuminate walkways, landscaping, or interesting features of your house to also improve curb appeal. Create a new flowerbed by building a simple retaining wall made of stone, bricks or concrete blocks to add contrast in your yard. Add a variety of shrubs, plants and flowers to add color and personality.

Under $5,000

Make your doorstep a welcoming place by adding a new screen door, tiling your doorstep, or upgrading your railing. Add a stone or brick walkway leading up to the doorstep or add pavers on the sides of your driveway for more style. If your home doesn't include many architectural details, add shutters or accent trim around windows, the front door, and the exterior of your home. If you own an older house and your gutters are rusting, peeling, or looking worn, consider updating your gutter system.

Under $10,000

Give your exterior a fresh coat of paint or consider adding siding. Siding is low maintenance, energy efficient and will add value to your home. Consider installing stone veneer to portions of the exterior to add visual interest. If you're driveway is cracking, showing wear or full of weeds, replacing your driveway with a new concrete drive can significantly update your home while increasing the value. Lastly, consider giving your landscaping a complete overhaul by hiring a professional to design the space with trees, shrubs, walkways, retaining walls and more to completely transform your curb appeal. If increasing the value of your home is important to you, First National offers flexible home equity loans with competitive interest rates to help you achieve your goals. For more information, visit firstnational.com or call 866.914.4387 today for more information.

No matter what your goals are or what stage of life you are in, it's important to put together a personal financial plan to help you navigate your financial future. Putting a plan in place will encourage and motivate you to save for (and help to meet) your financial goals. Identifying your goals and speaking with a financial advisor can help you get started on the road to financial success.

Identify your Current Financial Status

Evaluate your current financial status by identifying your assets, calculating your annual earnings, reviewing your credit history and assessing your insurance policies. It's important to know where you stand now before you begin planning for the future.

Define and Prioritize Attainable Goals

Your vision for the future is an important key to success. What is important to you? Educating your children, financial independence, protecting your loved ones or securing a comfortable retirement are all common and attainable goals that may resonate with you. Assign benchmarks for your goals that you can use to determine your success down the road.

Assess your Risk Tolerance

It's important to determine how much risk you are comfortable with before making any financial decisions that could impact your future. If you are comfortable with investing in opportunities that may drop in price before increasing in value, you may have a higher risk tolerance than those who would not be comfortable in investing in opportunities that may decrease in value. First National Bank's financial advisors will work with you to understand the types of investments that will help you achieve your goals while allowing you to remain comfortable and confident in your plan.

Put a Plan in Action

Identify the investments that will help you put your plan into action, such as mutual funds, stocks and bonds, IRAs, life, disability and long-term care insurance, and tax-deferred fixed and variable annuities. Align your goals with your investments and begin the process of opening new accounts or adjusting your current ones.

Monitor Progress and Adjust to Change

Your plan should allow for flexibility to adjust for future needs and wants, as well as any life changes you may encounter along the way. Meet with your financial advisor on a regular basis to monitor your progress and make any adjustments necessary to assist you in achieving your goals.

First National Investments & Planning* services are available to help you achieve your financial goals. We are on hand to offer you sound advice, a wide range of resources, quality products and superior service. Visit firstnational.com/investments or call 866.914.4387 today for more information.

*Securities products and advisory services provided by First National Capital Markets, Inc. (FNCM), a registered broker/dealer and registered investment advisor. Member FINRA & SIPC. Advisory services may only be offered by Investment Advisor Representatives in connection with an appropriate FNCM Advisory Services Agreement and disclosure brochure as provided. Investment products are: Not a Deposit • Not FDIC Insured • Not Insured by any Federal Government Agency • Not Guaranteed by the Bank • May Go Down in Value

Insurance products are offered through insurance companies with which First National Capital Markets, Inc. (FNCM) has sales arrangements.

Think of all you invest in a child: time, care, love…and an education. A child's future success begins with an education. Saving for college is an investment that can make all the difference in your child's life. September is National College Savings Month, to recognize the importance of attaining a higher education and to urge saving for children's education. It's a great time to begin to save for college.

Why Should I Save Now?

We have all heard that college costs are continuing to rise and there is an increase in the amount of loans students take out for college. Starting a savings plan early in your child's life could make a big impact years later when it is time to enroll in college. Starting to save when your child is young, even a small amount each month, gives more time for your savings to work for you to reach your savings goals. But, is never too late to start saving.

What is the Best Way to Save?

A 529 College Savings Plan is a great way to help you meet your college savings goals. There are federal tax advantages for investing in a 529 plan and you or your beneficiary's state may offer additional tax benefits for investing in its college savings plan.
Nebraska Educational Savings Trust's (NEST) 529 College Savings Plans puts you in the driver's seat to manage your college savings with:

• An affordable way to save with low fees;
• Tax-advantaged investing;
• Simple investment structure and flexible investment options;
• Rewards and scholarships; and
• Convenient service at all First National affiliated banks throughout Nebraska.

How Much Do I Need to Save?

Even saving a little now will make a big difference later. You can start out small and gradually build your savings, if needed. First National Bank's online calculator "What will it take to save for a college education?" can help you determine a starting point to develop a plan to meet your college goals. Remember you do not need to save for the entire cost of college.

It is important to choose the best 529 plan for you and your family and compare the benefits and expenses of each. Click here to learn more about the NEST College Savings Plans.