Happy New Year

You may not think that my title goes along with a consistent thought pattern, after all, taxes are one of those normal life headaches that cost us money and typically, savings is something we are doing that provides a long-term benefit. But what if you could save money and reduce your taxes at the same time? Have you considered the tax-deferral available to you by utilizing an IRA? IRA accounts have been around for a long time, and yet, many of us don’t take the opportunity to fund this portion of savings that avoid the taxes that would be imposed upon that income you are setting aside for future use – in retirement. We have a couple of good options for your consideration. Washington State Bank offers these first two options to anyone who wishes to start or continue depositing dollars for retirement planning. Traditional IRA – every taxpayer in the United States has this option, even if you are covered by an employer 401k or other type of retirement program. There are limits to the amount you may contribute, and I would encourage you to speak with your tax preparer about those limits. Roth IRA – this is going to be after-tax dollars, so you don’t receive the immediate benefit, but since you have already paid taxes on these contributions, you will be able to withdraw those funds with very little tax consequences in the future. In most cases, the withdrawals will be tax free. Additionally, we have a partnership with NestEgg that allows you to access investment products that are typically offered in a brokerage with a discounted fee structure. These investments allow you to increase your potential return over the time that you are working toward retirement. Nest Egg is an online brokerage and they offer one on one service as well as the opportunity for you to make investment choices on your own. Let me give you an example of how much you might be saving over a 20-year time frame… For example, you decide that in 2024 you wanted to defer the full amount of $7,000 to an IRA account. And you commit to setting aside this amount each year going forward. $7,000 per year for the next 20 years. I am going to use a conservative 6.0% return on investment over the 20 years. (For this example, I am using the Future Value of Money Calculator at calculator.net) In 2024, you begin and at the end of the first year you have a total of $7,420.00. At year 5 you would have a total of $39,459.00 (while contributing $35,000) By year 10, your $70,000 investment would be worth $92,265.00. In year 20, compounding has almost doubled your investment of $140,000 to a total of 279,949.09. If you are young and can afford this $7,000 annual investment – according to this calculator, you would accumulate $1,000,000 in 39 years. So, if you are in your 30s today, by beginning this simple plan, you would have saved one million dollars by the time you are 70 years old! I think just about everyone would be excited about that number. Start small, finish big. The rules of compound interest are always the same. If you don’t have $7,000 today, start by adding to your IRA on a monthly basis – that would be about $600.00 per month. Maybe the first question is why am I not already doing this? Michael Herzog President

When I was much younger, my father used to prepare for a long road trip by starting at our kitchen table and pulling out the current edition of the Rand McNally US Atlas. If you are of a certain age, you will remember this large book that was filled with maps by state to include all of the U.S. highways, state routes and back-country roads located within each of our 50 states. My father would go on to mark up the route in the book so Greetings to all of you who may be reading this short post! I love the changing of seasons in the Midwest, the renewed palette all around us as the trees and shrubs begin to show the Fall’s festival of color. Children are starting to think about the upcoming holidays and the annual gathering of candy from local neighbors willing to share. But, along with all of the positive vibes from the change to cooler weather come the regular emails and phone calls from “helpful” people looking to separate us from our money in less than honest ways. October has often brought a special emphasis on Cyber Crime and awareness to the dangers that our online lives make us susceptible to in the wider world. I was recently reading an email newsletter that I received from BankBeat, and in this article I thought it would be important to lift a couple of sections as additional information. Quoting from the article: “The statistics for individual fraud are staggering. According to the FBI’s 2023 Internet Crime Report , 880,418 complaints of cyber-crime were reported to the FBI by the public, a 10 percent increase from 2022. In 2023, there were more than 3,200 data compromises, up from 1,801 the year prior, according to the Identity Theft Resource Center. A study conducted by the Federal Reserve Bank of Boston indicates that check fraud in 2023 was $20 billion, up from $100 million in 2006.” Data compromises almost doubled from 2022 to 2023! $20 billion in check fraud in 2023! The criminals are very busy indeed. Even so, there are a few things that you can do to keep yourself safe from being a victim. First, NEVER, NEVER, NEVER click on a link in an email that you receive. If you receive a message from a familiar company telling you that you made a purchase or that your payment has been declined – DO NOT CLICK the provided link. Simply go to that familiar website directly, log into your account and check your activity. Let me give you an actual example of what this looks like…I receive at least 5 of these per week. Here is the text… “Thank you for your purchase. You bought $856.72 on October 21, 2024 using your credit card XXXX. If this wasn’t your purchase please click the link and you will be directed to our customer service team. Again, thank you for buying from Apple.com.” When you click the link you are immediately transferred to the scammers who will then look to “assist” with your purchase. They will likely ask you to let them share your computer screen – giving them access to your PC. Then they will obtain your credit card or bank account information in order to confirm that they have the correct information. Meanwhile, you are giving them access to your accounts and banking information. Do NOT make the mistake of thinking you can outsmart them, they are very good and very convincing. Secondly, keep your phone secure by not answering calls that you don’t know the caller. If a call comes to my phone, and the person doesn’t show in caller ID, I don’t answer. So, if by some chance you call my phone, you will likely go to voicemail. Very few scam calls leave a message. That is the easiest way to keep yourself safe while using your phone. Third, and final for this article, obtain a good Identity Theft partner. For many years you have heard advertisements for these companies, and there are many good ones, but be aware of the cost. I find that the companies with advertising budgets are typically, not always, more expensive to utilize. Also, be cautious about the “First Year Free or discounted”, that normally means that the ongoing years will be more expensive. We have a ID Theft program called ID Theftsmart here at the bank that is pretty economical and you don’t even have to be a cyber security. That was my only bank advertisement this month – but if you’re serious about staying safe online consider visiting these pages for more info: 1. Federal Trade Commission 2. CISA 3. National Cyber Alliance Have a wonderful Fall season and take some time to be safe online! Michael Herzog President