Memorial Day: How Did It All Begin?

Originally called Decoration Day, Memorial Day began following the Civil War when American families were counting their losses.  Popular poet Henry Wadsworth Longfellow captured the sentiment of the entire nation in the final stanza of his poem, “Decoration Day,” published in 1882:
Your silent tents of green 
We deck with fragrant flowers;
Yours has the suffering been,
The memory shall be ours.

In May of 1868, Gen.  John Logan, Commander of the Grand Army of the Republic, had issued the following order: “The 30th of May, 1868, is designated for the purpose of strewing with flowers, or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village and hamlet churchyard in the land.” 

Although many families traveled to cemeteries where fallen soldiers were buried for the purpose of placing flowers on graves, paying their respects and picnicking nearby, nobody was thinking about May 30th as we often think about Memorial Day weekend now. Decoration Day wasn’t set aside to be a three-day holiday for kicking off the summer months.

Decoration Day Became Memorial Day 

A century after Logan’s decree, in 1968, Congress passed the Uniform Monday Holiday Act, which included establishing Memorial Day as a federal holiday on the last Monday in May. The legislation took effect in 1971 and was intended to give federal employees a three-day vacation, so that’s when we all began to see the holiday as a time to relax, perhaps more than as a time to remember and honor fallen soldiers. 

By the year 2000, President William J. Clinton issued an official memorandum for all federal departments because a Gallup Poll had shown only 28% of Americans understood the true meaning of Memorial Day. It stated: 

“… I ask that all Americans come together to recognize how fortunate we are to live in freedom and to observe a universal ‘National Moment of Remembrance’ on each Memorial Day. This memorial observance represents a simple and unifying way to commemorate our history and honor the struggle to protect our freedoms.” 

You may be familiar with the 3 p.m. moment of silence observed by all Major League Baseball teams, NASCAR, Greyhound Lines, and NASA. And if you are traveling on Amtrak or located anywhere along its route at 3:00 pm on Memorial Day, you’ll hear train whistles blasting to honor “the service and sacrifice of America’s armed services.

The well-known red Buddy Poppies sold on Memorial Day by the Veterans of Foreign Wars (VFW) were also inspired by a poem, “In Flanders’ Field,” by John McCrae. They represent the blood shed by Allied soldiers in WWI, and the fields of poppies waving over their graves. VFW raises money each year to “honor the dead by helping the living.” 

The American Flag – Long May It Wave On Memorial Day 

Maybe you’re feeling inspired to fly an American flag on Memorial Day. If so, be sure to follow the proper etiquette.  To fly your flag at half-staff as a symbol of mourning, first raise it to the top of the pole for a moment, and then lower it to the halfway point. On Memorial Day only, the flag is flown at half-staff until noon, then raised up again between noon and sunset. This gesture is intended to represent the respect of the American people raising up the flag once again.  

If you’re planning to travel over Memorial Day weekend, whether visiting cemeteries or to simply enjoy a vacation, look around for discounts offered to military families and veterans, active or retired.  Museums, cruise ships, amusement parks, motels, restaurants and chain stores often choose to honor service men and women with military IDs, American Legion and VFW membership cards or VA letters. lists Memorial Day events around the country with frequently updates. Visitors to the Washington D.C. area will find many commemorative events scheduled on Sunday and Monday, but perhaps most popular will be the National Memorial Day Parade on Monday, May 30th. It begins at the corner of Constitution Avenue and 7th Streets, NW and ends at 17th Street.
The US Department of Veterans Affairs’ website lists Memorial Day ceremonies at national cemeteries in every state, with starting times and contact information included.  Although it occurs a few days before Memorial Day, one tradition at the Arlington National Cemetery may inspire you to develop your own traditions this year:
“For more than 60 years, the 3rd U.S. Infantry Regiment (The Old Guard) has honored America’s fallen heroes by placing American flags at gravesites for service members buried at both Arlington National Cemetery and the U.S. Soldiers’ and Airmen’s Home National Cemetery just prior to Memorial Day weekend. 
“This tradition, known as “Flags in,” has been conducted annually since The Old Guard was designated as the Army’s official ceremonial unit in 1948. Every available soldier in the 3rd U.S. Infantry Regiment participates, placing small American flags at each headstone and at the bottom of each niche row.”
Can you picture it? That’s over a quarter-million little American flags waving at one national cemetery alone. How will you pause to honor those who have given their lives for our freedom on Memorial Day this year?

Ransomware: The Modern Equivalent Of Being Tied To Train Tracks

When we think of ransom, we typically think of a black-and-white movie with a kidnapper leaving notes made from a variety of newspaper cuttings. Today, ransom is much less melodramatic, much more common and targets something you might not expect: your computer files. 

In late 2013, the ransomware threat was added to the list of things that can kill your computer alongside bugs and crashes. Hackers made a new bug that’s capable of taking over a computer, encrypting all its files and displaying a brief message demanding money to decrypt them. Sometimes, affected companies or individuals would pay up, the hacker would decrypt the computer as promised and everyone would be on their merry way. Victims would sometimes refuse to pay the fees in the given time and would then lose their valuable files forever. And sometimes, victims would fork over the cash, only to have the hackers disappear with the files still locked and therefore as lost as before the victims paid up.
One study estimates that in its first 100 days as a scheme, ransomware infected 250,000 computers. It earned the hackers a collected $6 million in bitcoins. If that trend continued, we can expect that they’ve hacked at least 24 million computers in the past two years. including one major hospital that reportedly forked over $17,000 to get its files back.
The original operator of ransomware, Cryptolocker, was shut down in May of 2014. Still, many ransomware copies arose shortly after and continues to wreak havoc. The program continues to evolve, now locking computers and displaying menacing countdowns to create a heightened sense of urgency to pay up.

The question now, of course, is what you should do to protect yourself. For starters, if the only computer you have to worry about is a private computer, ransomware is a less significant risk. Ransomware scammers tend to target computers of companies that have the capability to hand over large sums of money. If your computer handles the larger functions of a company, there are still some steps you can take to protect yourself.

1.) Don’t trust online solutions

For starters, there are many software programs that promise to completely rid your computer of ransomware, but those are best left on the virtual shelf. Ironically, some of those alleged file-saving downloads are actually ransomware in disguise. Your best bet is to backup your files however you can – onto an external hard drive, onto a separate computer or even on paper. Anything you do will ensure that, when the hackers come, you’ll already have those encrypted files elsewhere. It’s advisable to check at least once a month to ensure everything you need is safely backed up.

2.) Hold onto your money

While it might seem like the only option that gives you a chance to get your files back, the FBI has issued a statement asking people not to pay such ransoms. If hackers are paid, they have more incentive to continue, and payment really doesn’t influence whether they decrypt your files or not. “The FBI does not condone payment of ransom, as payment of extortion monies may encourage continued criminal activity, lead to other victimizations, or be used to facilitate serious crimes,” as FBI Special Agent Christopher Stangl elaborates in an interview. If you’re desperate for your files, paying may seem like the only option, but consider the difference that could be made if no one paid them anymore. Crime syndicates would be stopped without any work from the FBI.

3.) Call the cops, but don’t hold your breath

Many are currently asking whether anything significant has been done by the FBI to this point. This includes Sen. Ron Wyden, who wrote to James Comey, the director of the FBI, to ask how the agency intended to clean up the ransomware problem. Comey responded that they were making progress, but pointed out that making arrests wasn’t easy as “most of the top cybercriminal actors are located outside of the United States.” Still, he went on to assure Wyden that, “The FBI is committed to following the money in investigating all crimes with a financial component; ransomware is no exception.”

4.) Back up and stay safe

While the FBI has its best men on the task of catching these cyber culprits, it’s your responsibility to be as safe as possible until they do. Back your files up. Don’t click on any sketchy-looking links. Buy security that a trusted provider assures you is safe. Ransom is no longer a thing of black-and-white movies; but in the digital age, it’s still our job to protect ourselves.
Photo Source:  From Barney Oldfield‘s “Race For A Life” 1913 Silent Movie.

Steps You Can Take For Filling Your Pension Gaps

After a lifetime of hard work, many people expect to retire in some comfort and enjoy their remaining years. In some lines of work, especially public service professions like police and firefighting, the retirement package is a big part of the recruitment process. Yes, the hours are long and the work is dangerous, but the community values the services these individuals provide and the professionals appreciate the assurances that they will be taken care of after their working years have ended.

However, with states facing increasingly harsh economic times, many in government have been rethinking this arrangement. More people are living longer, which would otherwise be good news. In this context, though, the additional payouts are part of what’s creating a budget crunch. Many states, notably Illinois and Michigan, have been embroiled in efforts to cut benefits to retired workers.
According to economist Andrew Biggs, these difficulties stem from a chronic underfunding of benefits programs by state and local governments over the past decade. Faced with losses in tax revenue caused by recession, states and localities saved money for the present by not paying for the future. After years of this conduct, these programs are now running out of money.
Private sector pensions aren’t safe either. Several large, multi-employer firms have been attempting to renegotiate their benefits structure. It’s a move, according to Central States Pension Plan, designed to prevent them from running out of money. Labor unions, faced with decreasing employment and stagnant wages, are simply running out of money to pay existing beneficiaries. They may see even greater struggles as the pool of retirees expands.
The good news is that attempts to decrease current pension benefits have consistently met with resistance. This week, the Treasury Department rejected Central States’ petition to reduce benefits in a ruling that is consistent with other attempts to reduce existing benefits. If you’re currently on a pension, you may see a reduction in cost of living adjustments (COLA), but your benefits will likely continue as-is. If you’re counting on a pension to cover some or all of your retirement needs, though, you may be in trouble. Whether or not the reforms go through, pension-providing agencies are facing a funding problem that’s in need of resolution.
If you’re fairly new in your career, you’ve got plenty of time to adjust. You’ll need to re-evaluate your retirement planning strategies, but there’s still time to ensure you can retire safely and comfortably. If you’re closer to retirement, you’ll need to take action sooner to address this shortfall. Either way, try these steps:
1.) Re-evaluate risk
If you have private retirement funds, you may have been investing them fairly aggressively. You could afford to lose that money since your retirement income was guaranteed. Pursuing higher returns offered by a slightly riskier strategy makes sense in that instance.  
Without a safety net, though, those private retirement funds have got to last. Switching to a more conservative investment strategy will help you protect your nest egg in the event that your pension program falls through. You’ll see smaller returns, which may mean staying at work a little longer to fill the retirement bucket, but you’ll protect the retirement funds you do have.
2.) Cut your expenses
If you can’t increase your retirement income, the next best bet is to reduce your retirement expenses. For some of these, like utilities and other necessities, there’s little you can do. Many other expenses, though, are well within your means.
If you were planning to “downsize” when you retire, it might make sense to do so sooner than planned. If you can sell your house and move to a smaller location, doing so a little early might give you more investment capital. It’ll also lower your month-to-month expenses now, enabling you to put more money away for retirement. If you have adult children who are still living at home, it may make sense to help them get into a rental of their own. The increased cost of paying their rent may be offset by the decreased monthly expenses of a smaller home.
Another expense you can control is taxes. If you’re over 55, you can make “catchup” contributions of $6,500 to a Roth IRA, which will provide you with tax-free growth. Similar additional deposits in a 401(k) plan can also help make up for a lack of investment earlier. You can also make a conversion of funds from a traditional 401(k) or IRA to a Roth account, provided you pay taxes on them when you make the withdrawal. It might make sense to absorb these taxes now while you have the income to cover them rather than to wait until you’re depending on your assets for all your income.
Yet another way to minimize your tax burden is to contribute to a Health Savings Account (HSA). These plans allow for tax-deferred deposits and tax-free withdrawals to pay for medical expenses. You’re almost certainly going to have medical expenses in your golden years, so making the most out of these accounts while you’re working can be a big help.
3.) Save As Much As You Can

While you are working, sock away as much as you can into a Roth IRA, 401K or any other way you can, to supplement any pension plan offered by your employer.  Roth IRAs provide withdrawals that are tax-free at retirement, since they are after-tax retirement plans.  Ask Destinations Credit Union about opening your Roth IRA.

4.) Adjust your plans
It’s easy to catastrophize the decline of pension benefits. The immediate response might be despair and hopelessness. While it’s justifiable, it’s not a useful response. This bit of information requires you to change your plans. That’s all.
If you were planning to quit work as soon as you turn 65, you may have to change that plan and work a little longer. These are your peak income years, so it won’t be as much time as you think, especially with an intentional savings plan that’s designed to get you to your goal as soon as possible. Staying on a few more years is frustrating, but survivable.
You might also have to change what retirement looks like. It might mean getting a part-time or freelance job for the first few years to keep from cutting too much into savings. It might mean more limited opportunities to travel. Perhaps retirement involves a side hobby like furniture restoration or automotive repair that can generate a little income. These plan changes don’t mean you’re not going to retire, only that retirement means something slightly different now.
Your turn: What are your plans to close the gap between your retirement dreams and your work reality? Any tips to share with your fellow savers?

Private Mortgage Insurance – What You Need To Know

Whether you’re a long-time home owner or you’ve just started shopping for your dream house, you’ve seen stacks of papers full of acronyms. Buried amid the dense undergrowth of legalese are three letters that could be costing you more than you think. Be on the lookout for PMI: Private Mortgage Insurance. 

PMI in a nutshell 

Close your eyes and imagine yourself as a venture capitalist, like those you may have seen on “Shark Tank.” An inventor comes to you and says they’ve got a killer new product. They need $300,000 now and they’ll repay it with 4% interest over the next 30 years. If they don’t, you can take the manufacturing equipment they’re going to buy with your loan, which is worth about $250,000.

This isn’t a great deal for you – the venture capitalist – since you’re putting the remaining $50,000 on the line, and that’s not considering the cost of selling their equipment! They’re not risking anything. The equipment was bought with your money. You need to know they’ve got something at stake, too. So, they put up $30,000 of their own money. This is a better deal, but you’ve still got more to lose than they do.

This is where an insurance company comes in and says that, for $3,000 a year, they’ll protect the loan. If the inventor fails to deliver, they’ll repay the balance of the loan at that point. Sounds great, but who’s going to pay it? If you do, that just raises the amount you’re going to lose on this deal. Instead, you make the inventor pay it.

That’s how PMI works. The home buyer, in this example, is the inventor, and the lender is the venture capitalist. To make the mortgage an attractive option for lenders where scenarios like this happen, the home buyer needs a way to ensure the lender will be made whole (paid back in full) if something goes wrong. Importantly, PMI is protection for the lender, not the borrower. If you fail to make your mortgage payments, you will still face foreclosure even if you’re paying for PMI. All that changes is the institution that issued your loan can recoup its losses. 

Who has to pay for it? 

Not all mortgages require PMI. In general, loans made where the principal total is 80% or less of the sale price of the home don’t require PMI. If you put 20% down, lenders see that as a sign that you’re a safe risk. You’ve got as much skin in the game as they do.

Home buyers with a down payment of less than 20% may have to pay for PMI. Typically, costs are between 0.5% and 1.0% of the total value of the loan, with riskier loans requiring higher PMI payments. Sometimes, lenders offer loans to these home buyers that exclude PMI, but in order to make the increased risk worthwhile, such loans come with a higher interest rate.

PMI premiums can be made one of two ways. You may notice a line item in your mortgage estimate or statement that identifies your monthly premium for PMI. In other cases, it may be included with the closing costs as a lump sum. Some loans require both a payment at closing and an additional monthly premium. 

When can I stop paying for PMI? 

The 20% rule is a helpful one here, too. Once you’ve paid down enough of the loan to have 20% equity in your home (meaning your loan amount is less than 80% of the home’s market value), most lenders will no longer require PMI. Every month, a portion of your mortgage payment goes to paying interest, and a portion goes to paying the principal. The second part is how you increase your equity. Think of it as gradually buying your home back from the lender. Of course, you can make extra payments beyond the mortgage payment to reduce the principal faster and increase the percentage of home that you own.

Even with a 20% stake in your house, you may have to pay for PMI a little longer. Policies are generally purchased for a year, and monthly payments are held in escrow to cover yearly premiums. You may have to continue paying the premium until the year in which you reach 20% equity ends. Also, if you happen to live in an area where home values have risen, investigate the ability to get a new appraisal if you are paying PMI. If your home has gone up in value enough to get you pas that 20% threshold, you may be able to request cancellation of the PMI on your loan.

While PMI may seem unfair, remember that without it, lenders would be less likely to issue mortgages in the first place. PMI helps borrowers qualify for loans on homes they might not otherwise have been able to purchase. That means it helps put you in a nicer house without saving more for the down payment.


Your Credit Score: The (Other) Key To Your New Home

Each potential home buyer dreams of the day they’ll finally get the symbol of independence, security and prosperity: the key to the front door of their new home. Before you get that one, though, there’s another key you need to craft. Your credit score, a numerical representation of your credit history as an indicator of your ability to pay your bills, will determine a lot about your housing situation, from how much house you can afford to the interest rates you’ll receive.
Your credit score is determined by three different credit monitoring agencies: TransUnion, Equifax and Experian. Each has its own method for determining which events are most important to your score, so your number may vary depending upon the agency. Paying debts off, making payments on time and using only a small percentage of your available credit make your score go up. Missing payments, opening many credit accounts or carrying a significant balance of debt from month-to-month will decrease your score.
Less important than the actual score is your score grouping. Lenders tend to lump borrowers into four categories: sub-prime, near-prime, prime and super-prime. Different lenders break these categories down at different score points, but the terminology and treatment are fairly universal. Super-prime lenders get the lowest rates, because they represent the lowest level of risk for the lender. Sub-prime and near-prime borrowers will have a lower cap for the size of the loan they can take and will generally pay a higher interest rate. If you’re working on raising a low credit score, a good target number is 640. This will generally put you in the prime group and ensure you don’t have to pay extra on your mortgage because of credit. If you’re building good credit, 740 is generally the lowest super-prime score, which will give you access to some of the best rates and terms available.
If you’re going house-hunting in the next year, there are three steps you can take right now to improve the terms of your mortgage. Check your credit score, take steps to raise it and manage your loan in other ways. Taking these three steps will put you on the fast track to affordable home ownership! 
Check your credit score 
You can check your credit report for free once a year at Note, though, that there may be a nominal fee to receive your actual score along with the report. There are many similar websites, but many of them will charge you. Annualcreditreport.comis the site created by the three credit companies to provide consumers with transparent access to their financial information.
If your score isn’t at the level you think it should be, there may be errors or inaccuracies that are dragging down your good name. Look for accounts you don’t recognize or balances that are not up-to-date. You may even catch an identity thief red-handed! The report comes with instructions for challenging any item. In most cases, you can leave a note for lenders in the file explaining the item under dispute. 
Boost your credit score! 
There are no simple tricks to bump your credit score in advance of a mortgage. You need to develop a 6- to 12-month plan to boost your credit score before getting your mortgage by making sound financial decisions. Demonstrate to lenders that you can use credit responsibly, and your score will increase.
One of the biggest drags on a credit score is percentage of utilized debt. If you’re carrying a balance on credit cards, this tells lenders that you may be using credit to pay for your day-to-day expenses, and that lending you more money would not be a smart move for them. Getting balances to zero should be goal number one!
Also, take care that you don’t make any major purchases using credit right before you attempt to qualify for a mortgage. Even if you’re expecting a major windfall, such as an overtime check or a tax refund, creditors don’t see that on your report. Hold off until you have the cash in hand before you splurge on a new TV or car!
If it’s a lack of credit history that’s hurting your score, many lenders offer “credit builder” loans. These involve borrowing a small amount of money and making regular installment payments on it. Parents can frequently take out these loans on behalf of children to help them build a stronger credit history. 
What else? 
If your credit score is low, and there’s nothing you can do about it, you may need to take other steps to get a better position on a loan. You might try boosting your down payment or shopping for less expensive houses, so you’re borrowing a smaller sum of money. A co-signer, another responsible party willing to take on the risk of the loan, can also improve your terms. If your debt is a serious problem, perhaps moving into a new house isn’t a good short-term priority. Focus instead on paying off debt and saving up for a down payment. This can keep you from getting stuck with a house payment you can’t afford before you’re ready for it.
Destinations Credit Union offers its members free, unlimited financial counseling through our partnership with Accel Financial Services.  Take advantage of this great resource to help boost your credit score.