May 2019

Provided by Affinity Plus Investment Center

You can plan to meet the costs through a variety of methods.

How can you cover your child’s future college costs? Saving early (and often) may be the key for most families. Here are some college savings vehicles to consider.

529 college savings plans.

Offered by states and some educational institutions, these plans let you save up to $15,000 per year for your child’s college costs without having to file an I.R.S. gift tax return. A married couple can contribute up to $30,000 per year. (An individual or couple’s annual contribution to a 529 plan cannot exceed the yearly gift tax exclusion set by the Internal Revenue Service.) You can even frontload a 529 plan with up to $75,000 in initial contributions per plan beneficiary – up to five years of gifts in one year – without triggering gift taxes.1,2

529 plans commonly feature equity investment options that you may use to try and grow your college savings. You can even participate in 529 plans offered by other states, which may be advantageous if your student wants to go to college in another part of the country. (More than 30 states offer some form of tax deduction for 529 plan contributions.)1,2

Earnings of 529 plans are exempt from federal tax and generally exempt from state tax when withdrawn, so long as they are used to pay for qualified education expenses of the plan beneficiary. If your child doesn’t want to go to college, you can change the beneficiary to another child in your family. You can even roll over distributions from a 529 plan into another 529 plan established for the same beneficiary (or another family member) without tax consequences.1

Grandparents can start a 529 plan (or other college savings vehicle) just like parents can. In fact, anyone can set up a 529 plan on behalf of anyone. You can even establish one for yourself.1

These plans now have greater flexibility. Thanks to the federal tax reforms passed in 2017, up to $10,000 of 529 plan funds per year may now be used to pay qualified K-12 tuition costs.2,3

Coverdell ESAs

Single filers with modified adjusted gross income (MAGI) of $95,000 or less and joint filers with MAGI of $190,000 or less can pour up to $2,000 annually into these accounts, which typically offer more investment options than 529 plans. (Phase-outs apply above those MAGI levels.) Money saved and invested in a Coverdell ESA can be used for college or K-12 education expenses.3

Contributions to Coverdell ESAs aren’t tax deductible, but the accounts enjoy tax-deferred growth, and withdrawals are tax free, so long as they are used for qualified education expenses. Contributions may be made until the account beneficiary turns 18. The money must be withdrawn when the beneficiary turns 30, or taxes and penalties will occur. Money from a Coverdell ESA may even be rolled over into a 529 plan.3,4

UGMA & UTMA accounts

These all-purpose savings and investment accounts are often used to save for college. They take the form of a trust. When you put money in the trust, you are making an irrevocable gift to your child. You manage the trust assets until your child reaches the age when the trust terminates (i.e., adulthood). At that point, your child can use the UGMA or UTMA funds to pay for college; however, once that age is reached, your child can also use the money to pay for anything else.5

Whole life insurance

If you have a permanent life insurance policy with cash value, you can take a loan from (or even cash out) the policy to meet college costs. Should you fail to repay the loan balance, obviously, the policy’s death benefit will be lower.6,7

Did you know that the value of a life insurance policy is not factored into a student’s financial aid calculation? If only that were true for college savings funds.6

Imagine your child graduating from college, debt free. With the right kind of college planning, that may happen. Talk to a financial professional today about these savings methods and others.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Affinity Plus Investment Center advisors are registered representatives of CUNA Brokerage Services, Inc. Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No financial institution guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Citations

1 - irs.gov/newsroom/529-plans-questions-and-answers [2/20/18]
2 - cnbc.com/2017/12/29/tax-bill-529-plan-provision-helps-families-save-on-school-costs-taxes.html [12/29/17]
3 - forbes.com/sites/katiepf/2018/04/13/yes-the-coverdell-esa-still-exists-and-heres-why-you-should-care [4/13/18]
4 - irs.gov/taxtopics/tc310 [3/1/18]
5 - finaid.org/savings/ugma.phtml [5/8/18]
6 - collegemadesimple.com/whole-life-insurance-vs-529-college-savings-plans/ [5/9/18]
7 - marketwatch.com/story/a-529-roth-ira-insurance-whats-best-for-college-savings-2017-03-22 [5/13/17]

The birth of a child – it’s a time of celebration for the gift of life, and also, a time of transition and shifting when it comes to becoming new parents.

To help make the transition run a little smoother, Affinity Plus offers a six-week paid parental leave as a substantial benefit to employees who are experiencing a special life event - the birth or adoption of a child. The ability to stay home and bond with a child(ren) is immeasurable and Affinity Plus supports the focus on family.

Affinity Plus – Paid Parental Leave – Sarah Hom's Story

Sarah Hom knows life’s plans can change quickly in very big ways. She and husband Matt had two wonderful boys, Oliver (5) and Henry (2), and had not planned to have more children. However, life had more in store for them and soon they were expecting their third child, Gus. Thankfully, Sarah, Assistant Manager at the Affinity Plus branch in St. Cloud, knew she had options when it came to parental leave as the company had recently started its Paid Parental Leave program. She used the program’s six weeks of paid leave and added four weeks of FMLA (Family Medical Leave Act) coverage for 10 full weeks of leave. “I was so thankful to have the ability to take Paid Parental Leave,” said Sarah. “I struggled with post-partum depression after Henry’s birth and was nervous about having a third child. The paid leave gave me extra peace of mind knowing I could focus on me and my family.”

The leave also coincided with summer and the start of fall making it an extra special experience. Sarah said, “Not only did I get to spend extra time with Gus, I was able to watch Henry become a big brother and see him in a whole new light. Plus, I got to see Oliver start kindergarten! Those are one-of-a-kind, beautiful experiences that I cherish.”

Reassurance and Peace of Mind

Parents are often worried about leaving colleagues and projects during time away from work. Sarah initially had concerns too, but was reassured by Affinity Plus that all was ok. “They reminded me it was ok to take the time off and focus on my first priority as a mom and wife,” said Sarah. “It was also a huge plus to know I didn’t need to use vacation time for maternity leave and the time I had remaining would still be there for future use. Vacation time can go fast when you take time off to care for sick kids so every bit helps!”

Sarah is also a strong advocate of male colleagues making use of the Paid Parental Leave program. One male colleague had never taken parental leave and his wife was having their third child. He was concerned that work and clients would need him. Sarah said, “I told him it’s ok to take the time and that colleagues and clients will support his bonding with his child and assisting his spouse. We all love what we do at Affinity Plus, but we’re moms, dads and partners first. Paid parental leave isn’t an industry norm yet for dads so I understand how it’s a shift in thinking. I’m so thankful Affinity Plus now offers moms AND dads this opportunity.”

Affinity Plus – Paid Parental Leave – Amy Ausen's Story

Amy Ausen, Operations Specialist at Affinity Plus Federal Credit Union in St. Paul, enjoys time in the country with husband Mike and their family at home in western Wisconsin. It’s a place where daughters Hailee (3) and Callie (1) can run outdoors with dog Daisy and visit Buttercup, the pony at their grandma’s house.

The family of four had an extra special time bonding after Callie’s birth in March 2018 thanks to the six weeks of Paid Parental Leave offered by Affinity Plus. “We were able to use both short-term disability and the paid leave program for the first six weeks, which was crucial as Mike had no leave program and few vacation hours to use,” said Amy. “Because of the ‘double pay,’ my husband could take unpaid time off of work.”

This was especially helpful to have Mike at home during those first six weeks as Amy had a C-section leaving her unable to lift Hailee who was also sick the entire second week of Amy’s maternity leave. “The Paid Parental Leave program eased the financial stress and allowed us both to be home to care for both children without worrying how they would be taken care of,” said Amy.

Less Stress, More Snuggles

Amy’s maternity leave with Hailee was much different. “With Hailee, I did not have paid leave or short-term disability so we needed to take out an expensive secondary hospital stay policy in addition to banking enough vacation and sick time hours to take 12 weeks of leave. There was a lot of added stress on my first maternity leave. With the lack of stress the second time around, I just enjoyed Callie! The snuggles, the naps, the ability to just focus and play with her vs. trying to figure out other issues during my leave.”

Amy is thankful to Affinity Plus for offering the Paid Parental Leave program and encourages colleagues to use the program. “It was ‘easier’ to go back to work at the end of my leave because I got to spend more time with Callie with less stress. The HR team at Affinity Plus is fantastic! I just had to tell them I would use the program and that was it. They took care of everything for me! The fact that you can combine this program with short-term disability gives you so much flexibility. You can’t go wrong taking advantage of a great program like this.”

Credit unions, vendor partners, employees and local organizations are invited to attend the Affinity Plus Classic, a golf tournament supporting the Affinity Plus Foundation. The event will be held Tuesday, June 18, at Prestwick Golf Club in Woodbury. The Affinity Plus Classic will begin with a lunch and program, followed by a shotgun start at 12:30 p.m. It will conclude with an awards reception and the end of the golf tournament.

Registration is now open for this fun and exciting event!

Proceeds from the Affinity Plus Classic will impact individuals and communities from around the state through the Affinity Plus Foundation’s annual scholarship and grant programs. Last year, the Foundation awarded $70,000 in scholarships to students pursuing higher education and $64,000 in grant funding to educators, community groups and non-profits.

“As a credit union, Affinity Plus is proud to have 28 locations around the state of Minnesota, and through the Affinity Plus Foundation, we have an amazing opportunity to provide support to the people and local organizations that help our communities to grow and thrive,” said Foundation Board Chair Kristina Wright, SVP of Member Experience at Affinity Plus.

With mortgage rates rising in recent months, more home owners are choosing to fix up or add to the homes they already own – using their homes as collateral. Want to put in a pool or add a deck - expand your square footage? Here’s what you need to know from Travis Lambrecht, Affinity Plus’s HELOC expert:

What is a HELOC?

A home equity line of credit (HELOC) is a loan that is set up as a line of credit – instead of a lump sum. Think of it like a credit card with the limit set by how much value you have in your home.

“It’s a longer-term loan so rates are lower, making HELOCs a great option for larger or ongoing projects, such as remodeling and home improvement,” says Travis Lambrecht, Real Estate Operations Manager for Affinity Plus.

Tips for HELOCs:

• Estimate how much value you have in your home: The current market value, subtracting what you owe; that’ll give you a ballpark of how much you could borrow
• Don’t despair credit scores: It’s a factor, but the equity in your home is more important
  Make a repayment plan – much like a credit card there’s typically a minimum repayment due each month, with the ability to pay any additional amount
• Pay attention to the interest rates – they vary by institutions more than some other types of loans
• Factor in closing costs: They are typically lower than refinancing closing costs
  You use it for other large purchases as well; it’s not limited to home-related expenses
• Don’t borrow more money from the HELOC to cover your monthly loan payments or other day-to-day expenses 

Why Affinity Plus

• Affinity Plus advisors are here to INVEST in YOU through every stage of life
• Branches in 28 locations who take the stress out of finances
• Affinity Plus typically has lower rates than big banks, saving you hundreds or even thousands over the life of the credit line
• No origination, loan closure or annual fees
• Earn generous MyPlus Rewards points toward travel, gift cards and other rewards

On April 19, 2019, Affinity Plus Federal Credit Union reached a major milestone: the celebration of its 200,000th member. Jennifer Nagel from Crystal was the milestone maker, after she opened her account at the New Hope branch with Member Advisor Chioma Ejimkonye.

With the help from Jennifer’s husband, Brent, the couple came into the New Hope branch on Friday, April 26, 2019, for a big surprise! Jennifer had no idea she was the milestone maker, so with confetti canons, cake, balloons, and a sign, it definitely caught her by surprise.

We had the opportunity to sit down with Jennifer, and talk about what brought her into Affinity Plus, and what it means to hold the title of the “200,000th member.”

Tell us a little bit about yourself: Well, I’m married, I have two kids and we live in Crystal.

What brought you into Affinity Plus? I found an awesome deal on a car and so we were members and I knew you guys had great rates for auto loans. I saw the car I wanted at 9 a.m., so I stopped in here at 10 a.m. and set up a membership and then talked about getting a loan.

How is the new car, give us all the details: Well, it’s pretty exciting! (laughs) It’s my second minivan. I was hoping to not have another minivan but it’s so practical and we found a really great deal. (it’s a white mini van!)

What has your experience been like so far at Affinity Plus? It was really easy! I hadn’t been into a branch for a couple years, the last time was when we got our mortgage loan, but when I came in here, this is a new location, and it’s nice and easy, the staff was friendly. I was worried I would have to wait a little while but I didn’t – they saw me right away and helped me and approved me for the loan right away.

What does it mean to be the 200,000th member? Well, I am surprised and I was not expecting this! I really appreciate the effort that everyone went through – there’s cake, balloons and confetti and prizes and a nice sign that I can put up in my house and surprise the kids when they get home from school today.

Why should people choose Affinity Plus? Everyone’s been super welcoming when we came in, they have great rates, and I have been happy with it. My brother came here when he was a student at the University of Minnesota and now he’s 40 and still recommends Affinity Plus and that’s really how we got here.

Affinity Plus Federal Credit Union is pleased to announce the winners of the Affinity Plus Foundation Annual Scholarship winners. The Annual Scholarship Program recognizes Affinity Plus members for their leadership, character, community building and pursuit of education. Those awarded were incoming freshmen, current students, graduated students and non-traditional students.

“There are thousands of students across the state of Minnesota who pursue higher education each year, at universities as well as community and technical colleges,” said Foundation Board Chair Kristina Wright, Affinity Plus Senior Vice President of Member Experience. “The Foundation’s scholarship programs are one of many ways that Affinity Plus invests in our members and our communities to truly make a difference in peoples’ lives.

“We are so impressed with this year’s group of scholarship recipients, and we’re proud to be able to provide financial support in this way as they pursue their educational goals,” Wright added

The Affinity Plus Foundation is a 501(c)(3) serving Minnesota communities. Established in 2000 by Affinity Plus Federal Credit Union, the Foundation’s mission is to engage, educate and empower individuals and communities. Members of Affinity Plus can support the Foundation’s activities in a number of ways –

• Use your MyPlus Rewards points to donate to the Affinity Plus Foundation.
• Contribute directly to the Foundation using the online portal.
• Attend the Affinity Plus Classic golf tournament on June 18!

Get to Know the Winners

• Claudia C – Centerville: Claudia is a high school senior who will be attending the College of St. Scholastica in the fall of 2019, pursuing a career in the medical field. She is a frequent volunteer in her community, spending time at her local farmer’s market food shelf, senior living facility, in the nursery at her church, and as a mentor for an elementary-age girl in her school district.
• Arian T – Harris: Arian is currently a sophomore at Anoka Ramsey Community College, pursuing a degree in particle physics with aspirations to be a physicist. As a first-generation college student, he is engaged in a variety of ways in his campus community, involved in the honor’s society, participating in the psychology and environmental clubs, and he is a student senator, student ambassador and LeadMN scholarship recipient. Outside of school, Arian has been involved with an organization that helps homeless teenagers, leveraging his own personal experiences and knowledge to help others.
• Hunter H – Mankato: Hunter is currently a sophomore at Minnesota State University Mankato pursuing a degree in biomedical sciences, with nonprofit leadership certificate. He participated in a medical campaign mission trip to Guatemala, where he had the opportunity to educate and empower people to be proactive about their own health. Hunter has also volunteered for several years at the Mayo Clinic, logging more than 200 hours of time engaging with patients – some at the most stressful times of their lives – to provide moments of joy and to impact them positively.
• Joseph A – Minneapolis: Joseph is a junior at Augsburg University, where he has studied addiction counseling, social justice and political science. He has participated in choir, campus ministry and was president of the Student Senate, and he regularly volunteers for his local neighborhood association. Upon joining Augsburg, Joe began volunteering at the campus volunteer student-run food pantry, and he forged relationships with community partners and local non-profits to revive the struggling entity that now helps approximately 30 students per week gain access to healthy meals. When he sees a problem, he moves to action, seeking solutions. He is a first-generation college student, on track to achieve a Bachelor’s degree.
• Alexis G – Cottage Grove: Alexis is a high school senior who will be attending college in the fall of 2019, with the goal of becoming a veterinarian to fulfill a lifelong love of animals. Throughout her high school career she has been active in sports, music, National Honors Society and a variety of committees. Athletics have given Alexis the opportunity to support younger girls, both through sports camps and through mentoring relationships. She has spent time volunteering at the local animal humane society, non-profit horse ranches and the Minnesota Herpetology Society.
• Kevin L - Moorhead: Kevin is a graduate student at Minnesota State University – Moorhead. With an undergraduate degree in accounting, he is working toward his Master’s degree in accounting and finance. He has been active in the housing and residential life area, in both his role as a resident advisor and now a supervisor. In this role he coordinated community service activities, which includes volunteering at campus sporting events, raking yards for area senior citizens and writing Christmas cards for nursing home residents. Kevin is also engaged in intramural soccer and collects items for food drives.
• Kyle S – Deer River: Kyle is a high school senior who will be attending college in the fall of 2019 with the ultimate goal of earning a Master’s Degree as a physician's assistant. He is a regular volunteer at his church, is active in his school’s youth group, and is a six-year member of The Movement, a group of students that promote and mentor other students to prevent drug and alcohol use. Through these engagements, he has gained valuable leadership skills, including two years of formal training courses. Throughout his high school career, Kyle has also played basketball and track, and participated in band and robotics.
• Rupesh B – St. Cloud: Rupesh is an international student from Nepal currently studying computer science at St. Cloud State University. He leads the Nepalese Student Association at SCSU, is a student ambassador, works in the school’s tech department, and is involved in several clubs, sports and organizations within the university. His role as a student ambassador has led to volunteer opportunities outside campus, with the American Red Cross and the Salvation Army.

The Affinity Plus Foundation coordinates two scholarship programs each year:

• The Annual Scholarship Program awards eight $5,000 scholarship to Affinity Plus members. The application period opens in the fall, accepts applications through Jan. 31, and awards scholarships in March.
• The Campus Scholarship Program awards ten $3,000 scholarships to members who attend one of the six universities where we have a presence on or near campus (along with community & technical colleges). Applications are typically accepted August through October, with awards announced before year-end.