Author: Erin Roberts

Wheelhouse Individual Retirement Accounts (IRAs)* serve as tax-advantage investments that earn significantly higher dividends than a traditional checking or savings account. The rates and returns are more stable and less risky than other forms of investments, so you can spend more time enjoying life and less time worrying about the future.

Wheelhouse offers two types of IRAs: Traditional and Roth. It might seem difficult to navigate their differences, so we’re here to help break it down.

With a Traditional IRA, you pay taxes later. Contributions to your Traditional IRA are tax-deductible, meaning you do not pay income taxes on the deposits going in. Thus, your investments grow tax-deferred. When you’re ready to withdraw during retirement, you will pay federal income taxes on your contributions and earnings.

With a Roth IRA, you pay taxes now. The contributions you make to your Roth IRA are after-tax, meaning you pay income taxes on the deposits going in. Because of this, the investments grow tax-free. When you withdraw your contributions and earnings during retirement, you will pay no federal income taxes on your withdrawals.

Which is right for you?
Choosing between a Traditional and Roth IRA is as simple as asking yourself, “Do I want a tax break now or a tax break later?”

In general, if you believe you are at a lower tax rate today than you will be when you withdraw your funds, a Roth IRA might be better suited for you. Traditional IRAs are usually the right choice for high-income earners who are currently in high tax brackets, whereas a Roth IRA might be ideal for average earners who will likely stay in the same or move up in income brackets as their lives progress.

There are additional differences to account for as well, including when funds can be withdrawn without penalties. Generally, Roth IRAs have more flexible withdrawal rules. As always, consult with your tax advisor to determine which IRA option is best for you.

To get started or to learn more, visit our website or speak with a Wheelhouse professional at 619-297-4835

*Wheelhouse IRA deposits are federally insured by the NCUA. Please consult your tax advisor regarding any IRA account. Other terms and conditions may apply. Membership is required.

By GreenPath Financial Wellness

New Year’s resolutions are a mixed bag for many of us. On the one hand: personal betterment! On the other hand: methodical auditing of our refrigerator, checking account, and various vices. On the cusp of a fresh calendar year, we feel compelled to immediately transform our lives, but—as is the case with most good things—change takes time. This is especially true when it comes to financial goals. And in the aftermath of steep holiday spending, our goalposts can feel…far away.

If you want a few financial resolutions that you can achieve early into the new year (because who doesn’t love an easy to-do list??) here are some suggestions.

Automate Your Savings.
Life is expensive! Especially when you have your sights set on a vacation, home renovation, or even the creation of an Emergency Fund (which 26% of Americans report not having at all). Setting aside savings is a crucial step towards your financial health. There are multiple pathways to save, from automating contributions to an investment portfolio to downloading an app that bundles spare change on each transaction you make. If you want to avoid market fluctuations and go the straightforward route, set up an automatic direct deposit that funnels a percentage of your paycheck into a designated savings account. Then try not to touch it.

Enroll in a 401(k).
Speaking of savings…if your employer does not automatically enroll you in a 401(k) plan, you can sign up yourself. Unlike some company benefits (like flexible spending accounts or insurance enrollments that have deadlines), you can enroll in a 401(k) plan anytime during the year. So why not now? The sooner you can begin growing your retirement savings, the better. What you contribute is up to you, and many employers will match your contributions up to a certain percentage. If you earn income but don’t receive employer benefits, you can open a Traditional or Roth IRA as an alternative.

Trim subscriptions.
The average American underestimates their monthly subscriptions costs by $133 according to a 2022 survey conducted by C+R Research. People estimated they spent about $86 per month when in fact, they were spending about $219 per month. The start of a new year is a good time to take inventory of your streaming networks, music subscriptions, smartphone apps, wine club memberships, or any other miscellaneous expenses that might be drawing away from your overall savings goals.

Check your credit report.
You can get a free report once a year from each of the three major consumer reporting companies (Equifax, Experian, and TransUnion.) This allows you to resolve errors or instances of identity theft—red flags you do not want creditors looking at when they are evaluating your application for loans and credit cards. With the exception of Experian, you will have to pay a fee if you want to see your credit score. There is often a way around this, as more than 170 financial institutions and 10 of the top credit card issuers provide free access to your FICO score (the most commonly used type of credit score).

Resolved to Help
Need a little nudge when it comes to keeping your financial resolutions? Our partner GreenPath provides caring Financial Wellness Experts to assist in starting your year strong! GreenPath works with thousands of people each month to pay off debt, improve credit and lead a financially healthy life. Ring in the New Year…and then give them a ring! The call is free and confidential.

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

We all love the holidays – a time where family and friends are brought together by food and gift-giving. But that last part can be tricky for some. To manage holiday shopping, many people utilize credit cards which can boost your credit score and earn you perks like reward points. However, without careful planning, you could end up with an overwhelming amount of debt and negative marks on your credit report. Avoid these pitfalls by learning about the pros and cons of using credit cards for holiday purchases.

Pros of Using Credit Cards for Holiday Purchases
Reward Points
Some credit cards offer reward points for different types of purchases. Depending on your credit card, you could be earning miles, points, or even cash back. Our Wheelhouse Visa Platinum Rewards credit card offers cash back at qualifying stores and can even earn you bonus reward points such as 2x the points on utility bills and 5x the points per dollar at certain restaurants and retail locations (bonus reward points are subject to change at any time). If you manage your rewards wisely, you could see some serious benefits.

Fraud Protection
Perhaps one of the most overlooked perks of using a credit card for holiday shopping is safety and protection. The holidays are notorious for financial fraud, so it’s important to do everything you can to ensure your information and finances are protected. Most credit cards have a zero-liability policy that protects you from unauthorized purchases. Make sure you carefully read your credit card’s disclosure details, so you know what’s covered.

Improve Your Credit
Lastly, if you use your credit cards wisely, you may potentially help your credit score. Carefully monitoring your credit card utilization and not missing payments will allow the holiday purchases on your credit card to boost your credit score (since 35% of your score is based on your payment history). For more tips on maintaining good credit health, read our blog post on How to Maximize Your Credit Card.

Cons of Using Credit Cards for Holiday Purchases
Risk of Overspending
The biggest pitfall of using credit cards for holiday purchases is simply how easy it is to overspend. Good thing we have the tips you need to stay on track this gift-giving season.

The key to using credit cards wisely is to not spend outside of your means. Essentially, if you can’t afford something without a credit card, then you shouldn’t purchase it. When it comes to holiday purchases, it’s best to stay within your budget to avoid paying more than you need to in interest down the line.

Final Thoughts
So, should you use a credit card for your holiday purchases? When used properly, credit cards can be a convenient way to make purchases, rack up rewards, and increase your credit score all at the same time. If you’re worried about the risk of overspending, the WheelhouseCards App can help you monitor your Wheelhouse credit and debit card usage, set up alerts for high-risk transactions or set spending thresholds. You can also instantly “turn on/off” cards with the click of a button.