Newsletter



Remaining Strong, Offering Options

By Brad Herzet, President/CEO

With two major bank failures in the news earlier this year, you might wonder if a similar situation could happen with credit unions. Rest assured, credit unions remain financially strong, according to National Credit Union Association figures released earlier this year.


As in the banking industry, credit union deposits of up to at least $250,000 per individual depositor are backed by the full faith and credit of the U.S. government. While banks are insured by the FDIC, credit unions are insured by the National Credit Union Share Insurance Fund.


The banking failures earlier this year were caused by “bank runs,” which describes the scenario of too many depositors pulling out their money.


As the stewards of your money, I and the rest of my management team, along with the board of directors, keep a close eye on what is happening not only within Mid American but also in the financial industry. Mid American is well-capitalized, which is critical to a credit union’s success. The national average for capitalization, or net worth ratio, is 7% and we are at 10%. The higher the capital, the better protected we are.


Our leadership team also keeps an eye on what the Federal Reserve does with interest rates, and we remain very competitive in the rates offered on our various deposit and loan products. Compared to other Kansas banks and credit unions, our auto loan rates are among the best available. For deposits, we now offer a new high-yield Premiere Money Market Account that pays up to 3.00% APY, along with current certificate specials with yields as high as 5.00% APY.


On our mortgage loan side, we have started offering an adjustable-rate mortgage that is about a point lower than our other mortgage rates. In a sort of hybrid offering, the initial rate will remain fixed for seven years and then go to an adjustable rate. This can be a desirable option for those who know they won’t remain in their home for a longer time or who want to take advantage of a lower monthly mortgage payment for a while before refinancing with another mortgage loan product.


We have started a new credit card rewards program while maintaining our same low VISA rates of 9.9% for the Select VISA and 14.9% for the Everyday VISA. All MACU credit card holders are automatically enrolled; you just have to register at dreampoints.com/midamerican to manage and redeem rewards. Rewards earned can be redeemed for cash back, gift cards and merchandise, or real-time rewards applied to your purchases with select merchants.




How to Split Rent Fairly

By Emily Reinhardt, blogger for Mid American’s www.moneymatters.coop

There are many methods to split the cost of rent with others in a household, but not all may be fair to everyone involved. Whether you’re in a domestic partnership or just plain roomies, let’s explore some ways to split rent. Whichever way you plan
to split the rent and household expenses, finding what works for you and your roommates will require communication, patience and a willingness to compromise.

Equal Split
The most common rent split is probably the equal split method where everyone pays the same amount, regardless of room size or income. To accommodate differences in room sizes or the amenities that come with them, you can let one roommate have the bedroom with the private bathroom
while the other roommate gets to park in the garage. Finding additional ways to make an equal split method work might still require a little bit of negotiation.

Proportional Split
In the proportional split strategy, the rent is divided based on the square footage of each roommate’s bedroom. This takes into account differences in
room sizes and other amenities like access to private bathrooms or closets or driveway or garage parking. If some roommates get to have these extras, it could be worth paying a larger split of the rent.

Income-Based Split
There is also the income-based split method, where each roommate pays a set percentage of their income. Talking with a friend or loved one about your salary can be awkward at first, and even more awkward if you’re not very close with the roommate you’re living with. This method, however, could
lead to some people feeling resentful if they’re contributing significantly more than others and might be most comfortable for those in committed partnership housing arrangements. If it still feels too uncomfortable, try a different method of splitting the rent. And don’t forget all the additional
expenses that go along with sharing a household, such as utilities, internet, groceries, lawn care, home improvement and maintenance. If these are expenses that need to be shared among the household, you can split things evenly each month or assign a utility or expense to each roommate. These
expenses will require more tracking as they are not always the same cost each month.


New Digital Features for Your Finances


In September, Mid American will roll out upgrades to its online banking site and mobile app to enhance your digital banking experience and opportunities to interact with us online. Here are three features that you will find useful:

• Financial wellness tools. Budgeting and goal-setting features are part of the upgrades.
• A robust credit score section. Find your credit score and get insight into what factors impact your score. If you are contemplating a major purchase or
loan, you can run a simulation before you act on that decision to see how your credit score will be impacted.
• A dashboard look at all your financial accounts, even those not held at Mid American. Through the account aggregation feature, you will be able to link in your accounts at other financial institutions so you can get a comprehensive look at your overall financial situation.
Staff will be available by phone to handle member inquiries about using the upgraded website and app when it goes live in September.

Enhance Your Home on a Budget

By Debbie Stang, Home Loan Officer

Does your home need a little refreshing inside and out? There are lower-cost ways to change your interior or give your home some curb appeal than a major remodel. Plus, they likely won’t take as much time and are easier DIY projects.


• One of the simplest and most versatile ways to refresh the look of a room is paint. The hardest part is narrowing down your choice of color. Some retailers sell sample containers so you can give a new color a trial run. Besides a plethora of colors, paint also comes in different finishes. An eggshell finish has a subtler shine and is good for living rooms, hallways and bedrooms. Semi-gloss works better for trims and woodwork and helps set them apart from the wall color. Satin has some sheen to it and is good for bathrooms and kitchens. Flat is the least durable and harder-to-clean finish.


• Painting kitchen cabinets and vanities is also a way to change a look. You’ll need to clean and rinse the surfaces well and remove the doors (use
masking tape on the inside of the door to note which door goes where) before you tackle this job. You can also use paint to refresh the look of furniture or home décor items, like lamps. A fresh coat of paint on your front door can add instant curb appeal.


• Swap out items. Walk through your home with an eye toward how you can swap out furniture in different rooms. If you have stored home décor items, swap them out with current items. Check estate or garage sales or thrift stores for new-to-you home décor and artwork.


• Smaller outdoor projects for appeal include adding edging between garden beds and your lawn. Longer-lasting options are stone, brick or concrete.
Swap out exterior lighting features and replace your home’s address numbers. Add a few planter boxes while you’re at it. One design trick is to invest in a faux evergreen topiary in a planter.


If you want to invest in a bigger remodeling project, Mid American offers two home equity lending options: a loan or a line of credit. In both instances, the lending limit is determined by the difference between your home’s value and your remaining mortgage balance. For more information, please call 316-722-3921 and ask for either me or LeeAnn Marker in mortgages, or email debbies@midamerican.coop or leeannm@midamerican.coop.

 

 


Keep Your Auto Running


Regular daily driving can take a toll on your vehicle, including stop-and-go traffic, short commutes, hauling heavier loads (including cargo and passengers, not just towing), extreme heat and humidity and below-freezing weather. The best way to keep your auto in good driving form and to help avoid costly future repairs is regular maintenance. Here are some items that should get regular checks:

  • Oil levels. Generally, check oil levels around 3,000 miles/3 months and get an oil change every 5,000 miles/6 months.
  • Tire pressure. Too much and too little pressure can cause uneven wear. A just-right tire pressure will also help with your vehicle’s fuel usage. With a good quality tire pressure gauge, check when the tires are cold or have not been driven for three hours since heat will expand tires. Your tires’ recommended pressure rating can be found in your service manual, while the rating listed on tire sidewalls is the max pressure allowed. Rotate tires regularly to maximize their life.
  • Check the battery and cables for any corrosion and ensure cables are tightened.
  • Wiper blades. Economically priced blades may need to be replaced every six months or so, while premium blades can last two to three times longer. Check the windshield washer fluid every three months or so.

Fixed for Life: What Can an Annuity Do for You?

By Jessica Brokaw

With stock and bond markets both faltering over the past year, it’s easy to see why more near-retirees have a newfound appreciation for fixed annuities, which are insurance contracts that guarantee a specified rate of return in retirement.


Income for Now or Later
An immediate fixed annuity is usually purchased at the beginning of retirement, often with a lump-sum premium. The fixed payments start within 12 months from the date the annuity is purchased and continue for the duration of the contract.


With a deferred fixed annuity, you can make a series of premium payments, and the income is delayed until a future date of your choosing. The income payments reflect the value of the premiums paid, the annuity’s compounded return, and the length of the payout period (or your life expectancy). The longer you defer your annuity, the higher the payout can be.


Annuities have no annual contribution limits, so you can save as much as you want on a tax-deferred basis. When annuities are purchased with after-tax dollars, only the earnings portion of withdrawals is taxable as ordinary income. You can also invest in an annuity through a qualified (tax-advantaged) retirement plan. In this case, the qualified annuity is subject to the same tax rules as the qualified plan, so there is no additional tax benefit. For both qualified and nonqualified annuities, early withdrawals prior to age 59½ may be subject to a 10% penalty.


Annuitization Options
Converting annuity funds to an income stream is called annuitization. Before annuitization, you can withdraw some or all the annuity funds in a lump sum or a series of distributions. However, surrender charges may apply. If you die before annuitizing, your heirs will receive the annuity’s accumulated funds. After you annuitize, you cannot take lump-sum distributions.


With either annuity, you have three options for the income stream you receive. A straight, guaranteed lifetime income will provide the highest monthly payments and help protect against the risk of outliving your savings. But payments will typically end when you die, with no funds going to your heirs. A period certain income provides income for a fixed number of years and will go to your heirs if you die before the end of the period, but you risk running out of income if you live beyond that period. Life with a period certain income guarantees you a lifetime income along with a time period in which it can pass to your heirs, but payments are generally lower.



Jessica Brokaw is available for free consultations by telephone 9 a.m. to 3 p.m. Monday through Thursday or in-person by appointment only at the west Wichita branch. She can be reached at 316-722-3921, ext. 182 or Jessica.Brokaw@cusonet.com.

Annuities have contract limitations, fees, and expenses, and they are not appropriate for every investor. Withdrawals reduce annuity benefits and values. Any guarantees are contingent on the financial strength and claims-paying ability of the issuing insurance company. Investors should be aware that when they purchase a fixed annuity, they may sacrifice the opportunity for higher returns that might be available in the financial markets, and that inflation could reduce the future purchasing power of their annuity payouts. Annuities are not guaranteed by the FDIC or any other government agency. They are not deposits of, nor are they guaranteed or endorsed by, any bank or savings association.
*Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CFS”) a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment representatives are registered through CFS. The Credit Union has contracted with CFS for investment services. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions holding company. Atria is not a registered broker-dealer and/or Registered Investment Advisor and does not provide investment advice. Investment advice is only provided through Atria’s subsidiaries. CUSO Financial Services, LP is a subsidiary of Atria.