Should You Choose a Traditional or Roth IRA?

IRA—those three little initials can play a big role in your retirement savings plan. That's because they protect you from three other little initials: IRS. If you haven't already included an individual retirement account in your retirement savings plan, you're missing out on a great way to save for your retirement dream and reduce your tax bill as well.

Before you run out to open an IRA, decide which one (traditional or Roth) is right for you.

A Traditional IRA:

  • Permits contributions up to age 70 1/2 if you have earned income
  • Provides a current tax deduction for eligible participants (the IRS subsidizes your savings!)
  • Allows investment earnings to grow tax-deferred (distributions will be taxed at your regular income tax rate at the time of withdrawal)
  • Requires distributions to begin by age 70 1/2

A Roth IRA:

  • Permits contributions as long as you have earned income
  • Allows investment earnings to grow tax-free (there is no current tax deduction on contributions, but distributions in retirement are not taxed)
  • Does not require distributions to begin by any particular age (in fact, a Roth IRA can be passed along untouched to your heirs)

Although both IRAs offer tax benefits, the differences between the two can't be stressed enough. The traditional IRA allows federal tax-deductible contributions and tax-deferred withdrawals while the Roth offers federal tax-free withdrawals (but no current deduction). Either way, you win with an IRA!

Learn more about IRAs and retirement options

Covering the Cost of College

The cost of college is on the rise and finding the money to save for college can be a challenge in an uncertain economic environment. We constantly hear from parents and students wondering the best way to save for college.


If you have time to save, consider these options:
1.   Save tax-free with a Coverdell Education Savings Account. This investment account allows you to grow money tax-deferred and proceeds to be withdrawn tax free for qualified education expenses at a qualified institution.
2.   Another way to save is with a Certificate of Deposit (CD) which earns higher interest than a savings account.

If you have run out of time and you need solutions to help pay for college soon, consider these options:
1.   Free money is always the best option. So apply for as many scholarships and school grants as you can. College Scholarships is a good website that gathers available scholarships and grants opportunities for you to view all in one place along with helpful application tips.
2.   Next, consider a government loan based upon you financial need such as a Stafford Loan. To determine your need, fill out a Free Application for Federal Student Aid (FAFSA). The worksheet will take into account your estimated college expenses and any financial aid and scholarships you will receive. The Student Aid Report you receive back will tell you how much your family is expected to contribute toward college expenses. The difference between that and the cost of attending college is the amount you may be able to borrow.
3.   Once you have exhausted the resources available through scholarships, grants and federal aid, you may still find that you still have a gap to fill in order to cover all the expenses of college—room and board, books, tuition etc. This is when you should consider a Private Student Loan.  A Private Student Loan can help cover college expenses when other aid falls short. Learn more about BECU Private Student loans.
To find a plan that works for you visit


Who Do You Want to Inherit Your Money?

There is one estate planning concern that is shared by people from all income brackets—the decision of who gets what when you’re gone. Keeping the beneficiaries on your retirement, insurance or other investment accounts up to date probably isn’t on the top of your “to do” list…but I cannot stress enough how important it is.

While some individuals logically assume that a will is the official forum to express such decisions, that’s not always the case. If you pass away, it’s not your will that determines who inherits your life insurance policies, employer-sponsored retirement plan accounts and IRAs… it’s your beneficiary designations.

When was the last time you reviewed the beneficiaries on your accounts?     

Life events can change everything. If you were married, divorced, had a child, or a death in the family since you opened your account, then you definitely need to consider updating your beneficiary designations.

When naming beneficiaries, remember to consider:

The age of the beneficiary.
Many policies and plans will not directly transfer assets to minors until a trustee or guardian is approved by a court.

The ability of the beneficiary to manage assets.
Perhaps a trust set up in the person’s name would be better than a direct transfer.

Employer-sponsored retirement plans.
Unless expressly waived by the spouse in writing, the law requires a spouse to be the primary beneficiary of the account.

Naming contingent beneficiaries.
Should something happen to your primary beneficiary, the contingent beneficiary would receive your assets.

Take the time now to make sure the parties you designated as beneficiaries on your accounts are the ones you want to receive your money.

Inflation is Coming—Get Ready

Most experts agree it’s not a matter of if we will have future inflation; it’s a matter of when we will have it.

What is inflation?

Inflation is the rising cost of goods and services over time. You may notice the price of everything from your coffee to your cotton shirt rising. Like termites invisibly gnawing at the foundation of a house, inflation slowly eats away at the value of a dollar over time.

What does it mean for your retirement?

Rising prices tend to beget more rising prices and interest rates could head in the same direction. Do you know how your retirement and other investment accounts are positioned to withstand an inflationary period with rising interest rates?

Bonds can be an important part of your investment strategy; however, with rising interest rates the price of the bond will fall, with longer maturities feeling the biggest impact. For example, according to a T. Rowe Price Analysis, if interest rates rise by just 1%, the price of a 30-year treasury bond would decline by 14.3%.

If you haven’t considered the impact of inflation and rising interest rates, now is the time to do so, or seek the advice of a financial advisor. Schedule a complimentary consultation with BECU Investment Services.

What’s Does Your Credit Rating Mean to You?

Since good credit is such a valuable financial tool, you'll want to protect yours so that it's there for you when you need it.

You may have thought you got the last report card of your life when you graduated from school. But then there are credit reports, which actually grade you on how you pay your bills. Just the way a good report card helped get you into the school or the job you wanted, a good credit report can help you get things you need, like: a mortgage, a credit card, a loan, better terms on the money you borrow, an apartment, automobile, or even a new job.

Since good credit is such a valuable financial tool, you'll want to protect yours so that it's there for you when you need it.

Get Your Free Credit Report
YOU are the first line of defense in keeping your credit safe. If you haven’t obtained a recent copy of your credit report, that is the first step. Visit for a free report from all three credit reporting bureaus. If you see errors on your report, dispute these with each bureau. Instructions on how to do so are at each site.

Making all of your payments on time and keeping your credit balances low are the two most important factors in achieving a strong credit rating.  If possible keep your outstanding balances to no more than 10% of your available credit for revolving loans.

Free Seminars
BECU offers free educational seminars on a variety of topics, including Understanding Credit Reports. To find a seminar near you, visit

Selling Your Home? Keep Those Receipts!

If you have owned your home for some time, it is quite possible that you can sell your home for a profit. If you can accomplish that, then you also want to make sure that you minimize your tax liability.

With real estate prices declining over the past few years, selling your home for a gain may sound improbable. But if you have owned your home for some time, it is quite possible that you can sell your home for a profit. If you can accomplish that, then you also want to make sure that you minimize your tax liability.

In order to see tax savings, you want to report the lowest capital gains that you can so that you are taxed on the smallest amount of money possible. When selling your home, the idea is to get the cost basis as high as possible, so that it will be as close to the sales price as possible.

But how do you increase your cost basis?
In the years before selling your home, you want to keep track of any major improvements that you've done to your home. The expenses for these improvements can be added to the cost basis for your home.

Expenses that improve the value of your home, such as landscaping, a new deck, or a furnace may be added to your home’s cost basis. Your tax savings can really start to add up if you have a folder full of receipts to verify your expenses.

So save those receipts. If you haven’t in the past, now is the right time to start. 

Free Educational Articles
BECU provides free educational articles on a variety of topic, including home selling. To learn more go to and click on the Education and Resources tab at the top of the page.

The information provided here is intended to help you understand the general issues and is not intended to constitute any tax, investment, or legal advice or to substitute for obtaining tax, investment, or legal advice. Consult your financial, tax, or legal advisor regarding your own unique situation.

Phishing, Vishing and Smishing, Oh My!

Phishing, Vishing and Smishing have proven to be an extremely profitable business for criminals. We can expect criminal organizations to more frequently adopt these techniques, and expect to see further evolution of each threat.

What is Phishing?
Email and Internet fraud is known as Phishing— this is because the criminal perpetrators put out "bait" in the form of electronic messages to see who will bite.

What is Vishing
The term Vishing is derived from a combination of “voice” and “phishing.” The fraudster uses a fraudulent or untraceable phone number to trick the victim into giving up personal information.

What is Smishing?
A fraudulent message sent via an SMS text on your cell phone.

Phishing, Vishing and Smishing have proven to be an extremely profitable business for criminals. We can expect criminal organizations to more frequently adopt these techniques, and expect to see further evolution of each threat.

Vishing will become an increasingly popular attack for phishers because of its ability to reach beyond the computer screen and target a broader range of potential victims and because it is a more effective platform for launching social engineering attacks. The historical trust that consumers have placed in telephone services—the assumption that the phone number calling the consumer can be traced—will be fully leveraged by phishers for maximum profit gain.

8 Things You Can Do To Help Protect Yourself

  1. If anyone or any email asks you for your personal information, do not give it. Always call the phone number on the back of your debit or credit card to validate the request.
  2. Keep your anti-virus software up to date. Anti-virus software is no longer an option, it's a necessity.
  3. If you have online banking, make sure you check it at least every couple of days. Financial fraud can happen fast.
  4. If you use your bank's free bill pay, keep watch for fraudulent activity.
  5. Only buy from trusted online stores. If you cannot confirm that the store is legitimate, do not buy from it.
  6. Always look for a company phone number and address and do not be afraid to call it to make sure it is real.
  7. Keep your passwords stored in a safe location and do not let your browser or Windows remember your password for you.
  8. Clean up your computer often to ensure that your personal information is not lurking in your Internet browser's history files.

Free Shredding Event
BECU is hosting a free shredding and electronic recycling event on Saturday, April 16 at BECU locations in Everett, Tukwila and Federal Way. Get more information at