WINTER 2018 NEWSLETTER

Happy New Year!

From all of us at Red Wing Credit Union
Front Row: Lori Anderson, Patti Killian, Dawn Bitzan, Rich Douglas
Middle Row: Sue Rusch, Cindy Betcher, Katie Wang, Emily Groetsch, Traci Sonju
Back Row: Kaitlyn McMahon, Barb Tesdall, Aaron DeJong, Heidi Aslakson, Tiffany Harrell, Linda Dietz, Sandy Place, Leah Dietz, Lynn Holm
Not Pictured: Aly Dietz, Kasey Mitchell, Kierstin Stelter

$20,000 in Scholarships Available to Members

$20,000 in Scholarships for CU MembersCredit unions are local, not-for-profit financial institutions. We are focused on providing members with the tools to succeed. That is why we are partnering with the Minnesota Credit Union Foundation Scholarship Council to offer $20,000 in scholarships to you, our members.

A total of 14 applicants will receive funds in the form of two $3,000, two $2,000 and ten $1,000 scholarships. Any Red Wing Credit Union member pursuing education in the fall of 2018 and spring of 2019 is eligible to apply and applications are being accepted through February 1, 2018. Click here to apply.

The 2018 essay question is: What is your best-ever consumer experience? Where was it [anywhere]? What made it so great?

SCHOLARHIP TIMELINE

  • October to February 1 - Essays and applications accepted
  • February 1 - Scholarship submission deadline for online
  • February to March - FSC Committee reads and evaluates scholarship essays
  • Mid-March - Final scholarship essay read and scoring
  • Late March to April - Announce winners

SCHOLARSHIP ELIGIBILITY

Scholarship applicants must be one of the following type of students:

  • Traditional: current high school student graduating in 2018
  • Traditional: PSEO (high school students utilizing post-secondary education option but not graduation in 2018)
  • Non-traditional: post high school student or those returning to post-secondary after some time off

In addition, scholarship applicants must meet the following eligibility criteria:

  • Enrolled or plan to attend an accredited, non-profit educational institution in an undergraduate or graduate program (both master and doctorate). Awards will not be disbursed until the student is accepted and enrolled in an accredited institution.
  • Enrolled in at least one course at the accredited school during the scholarship application time frame.
  • Must be a credit union member in good standing (as determined by your credit union) affiliated with the Minnesota Credit Union Network.
  • Information provided on the application must be accurate and solely the authentic work of the applicant.

APPLICATION & ESSAY SUBMISSION GUIDELINES

Applications must be submitted electronically by 11:59 p.m. Central Standard Time February 1, 2018. Applications submitted after the deadline will not be considered. Submit a 500-word essay answering the essay question for this scholarship period. The essay should not exceed 500 words. Transcripts and letters of recommendation will not be considered. Do not use your name or the name of your credit union in your essay or on the essay page. Essays that include your name or the name of your credit union will be automatically disqualified. Spelling, grammar and creativity will be considered.

Click here to apply.


 

Privacy Notice

Federal law requires us to tell you how we collect, share and protect your personal information. Our privacy policy has not changed and you may review our policy and practices with respect to your personal information at: www.redwingcu.com or we will mail you a free copy upon request if you call us at 651-388-7133.

RWCU Pay It Forward Day

On October 9, 2017 the credit union staff participated in CU Forward, a statewide day of Minnesota credit unions spreading kindness in the communities they serve through random acts and empowering others to do the same. The day is held annually on Columbus Day, a federal holiday on the second Monday of October. The community project our staff volunteered for was helping with the beautification of the Burnside Cemetery.

 

HOLIDAY SCHEDULE

Red Wing Credit Union will be closed in observance of the holidays on the following days:

  • Martin Luther King Day - Monday, January 15
  • Easter (recognized) - Saturday, March 31
  • Memorial Day - Saturday, May 26 and Monday, May 28
  • Independence Day - Wednesday, July 4
  • Labor Day - Saturday, September 1 and Monday, September 3
  • Columbus Day - Monday, October 8 (Closing at noon for community service project)
  • Thanksgiving - Thursday, November 22
  • Christmas Eve - Monday, December 24
  • Christmas Day - Tuesday, December 25

The Board of Directors and the entire staff of Red Wing Credit Union would like to wish you and your entire family all the very best for the upcoming holidays and a happy and prosperous new year in 2018.

As always, you can access your accounts anytime 24/7, via our online banking, through Touch Tone Teller or with our Mobile Banking App. You can also obtain cash at our ATM or thru a cash-back purchase at a big-box retailer using your check card.

 
 

Save on TurboTax, the smarter way to your biggest tax refund!

TurboTaxThe TurboTax program offers credit union members great discounts on TurboTax products. No matter where life takes you, TurboTax guides you like a GPS to your maximum refund. As a member of Red Wing Credit Union, you can save $5 on TurboTax Deluxe© - the #1 best-selling tax software. With TurboTax, you'll get your taxes done right and your biggest possible refund, guaranteed. And with NEW TurboTax Live©, you can have a live CPA or EA by your side to answer questions and review your tax return.

You don't need to be a tax expert to get our taxes done right. TurboTax translates taxes into easy questions about your life and puts everything in the right forms for you.

  • Guides you step by step to your biggest refund guaranteed.
  • Calculations are guaranteed 100% accurate, so you know your taxes are done right.
  • Double checks your return so you get all the deductions and credits you deserve.

Start for Free today - you don't pay until you're satisfied with the results.

Click here to start.


 
 

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Limited time offer for TurboTax 2017. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. Intuit, TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries.


Investment Corner by Rich Douglas

Pretax, Roth, or After-Tax Contributions: Which Should You Choose?

If your employer-sponsored retirement savings plan allows pretax, after-tax, and/or Roth contributions, which should you choose?

Pretax: Tax benefits now

With pretax contributions, the money is deducted from your paycheck before taxes, which helps reduce your taxable income and the amount of taxes you pay now. Consider the following example, which is hypothetical and has been simplified for illustrative purposes.

Example(s): Mark earns $2,000 every two weeks before taxes. If he contributes nothing to his retirement plan on a pretax basis, the amount of his pay that will be subject to income taxes would be the full $2,000. If he was in the 25% federal tax bracket, he would pay $500 in federal income taxes, reducing his take-home pay to $1,500. On the other hand, if he contributes 10% of his income to the plan on a pretax basis--or $200--he would reduce the amount of his taxable pay to $1,800. That would reduce the amount of taxes due to $450. After accounting for both federal taxes and his plan contribution, Mark's take-home pay would be $1,350. The bottom line? Mark would be able to invest $200 toward his future but reduce his take-home pay by just $150. That's the benefit of pretax contributions.

In addition, any earnings made on pretax contributions grow on a tax-deferred basis. That means you don't have to pay taxes on any gains each year, as you would in a taxable investment account. However, those tax benefits won't go on forever. Any money withdrawn from a tax-deferred account is subject to ordinary income taxes, and if the withdrawal takes place prior to age 59 1/2 (or in some cases, 55 or 50, depending on your plan's rules), you may be subject to an additional 10% penalty on the total amount of the distribution.

Roth: Tax benefits down the road

On the other hand, contributing to an employer-sponsored Roth account offers different benefits. Roth contributions are considered "after-tax," so you won't reduce the amount of current income subject to taxes. But qualified distributions down the road will be tax-free.

A qualified Roth distribution is one that occurs:

  • After a five-year holding period and
  • Upon death, disability, or reaching age 59 1/2

Nonqualified distributions are subject to regular income taxes and a possible 10% penalty tax. However, because Roth contributions are made with after-tax dollars, a distinction is made between the portion of the distribution that represents contributions versus earnings on those contributions. If at some point you need to take a nonqualified withdrawal from a Roth 401(k)--due to an unexpected emergency, for example--only the proportion of the total amount representing earnings will be taxable.

Example(s): In order to meet an unexpected financial need of $8,000, Tina decides to take a nonqualified hardship distribution from her Roth 401(k) account. Of the $20,000 total value of the account, $18,400 represents after-tax Roth contributions and $1,600 is attributed to investment earnings. Because earnings represent 8% of the total account value ($1,600 / $20,000 = 0.08), this same proportion of Tina's $8,000 distribution--or $640 ($8,000 x .08)-- will be considered earnings subject to both income taxes and a 10% penalty tax.

However, keep in mind that tapping your account before retirement defeats its purpose. If you need money in a pinch, try to exhaust all other possibilities before taking a distribution. Always bear in mind that the most important benefit of a Roth account is the opportunity to build a nest egg of tax-free income for retirement.

After-tax: For those who are able to exceed the limits

Some plans allow participants to make additional after-tax contributions. This plan feature helps those who want to make contributions exceeding the annual total limit on pretax and Roth accounts (in 2017, the limit is $18,000; $24,000 for those age 50 or older). As with a traditional pretax account, earnings on after-tax contributions grow on a tax-deferred basis.

If this option is offered (check your plan documents), keep in mind that total employee and employer contributions cannot exceed $54,000, or $60,000 for those 50 and older (2017 limits).

Another benefit of making after-tax contributions is that when you leave your job or retire, they can be rolled over tax-free to a Roth IRA, which also allows for potential tax-free growth from that point forward. Some higher-income individuals may welcome this potential benefit if their income affects their ability to directly fund a Roth IRA.*

*In addition to rolling the proceeds to a Roth IRA, participants may also (1) leave the assets in the original plan, (2) transfer assets to a new employer's plan, or (3) withdraw the funds (which in some cases could trigger a taxable event).

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Retirement Solutions are not affiliated. Investments not NCUA insured, not credit union guaranteed, may lose value.

"These are the opinions of Rich Douglas and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Diversification and asset allocation strategies do not assure profit or protect against loss. Indices mentioned are unmanaged and cannot be invested into directly. Past performance is not a guarantee of future results."

These examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal

Contact Us
  • Red Wing Credit Union
    3303 North Service Drive
    Red Wing, MN 55066
  • Phone: 651-388-7133 or 1-888-388-7133 (toll free)
    Fax: 651-388-7137
Hours
  • Lobby:
    8:30 a.m. - 4:30 p.m., Mon - Fri
    8:30 a.m. - Noon, Sat
  • Drive-Up
    8:30 a.m. - 5:00 p.m., Mon - Fri
    8:30 a.m. - Noon, Sat


NCUA
Federally insured by the NCUA up to $250,000
 
Equal Housing Lender