In This Issue
Eight Traits of Success 14
Top Summer Reads 20
Mortgage Game Plan 22
m aga z i n e
A M e m b e r ’s G u i d e to F i n a n c i a l S e c u r i ty
Can
Work
Optional?
Ever Be
Start putting the pieces
in place for the financial
future you want Page 16
Plus on page 25
Summer 2010
USAA’s Privacy Promise to You
Welcome TO USAA Magazine
«
message from the president and ceo
»
A Proud Heritage
attended USAA’s screening of the documentary
Brothers at War in Washington, D.C., in April. Retired Army Maj. Gen.
Kelley Lemmon is a 1937 graduate of West Point and a highly decorated
hero of World War II.
As the story goes, in 1944, then–Lt. Col. Lemmon
was a battalion commander in front of Gen. George
Patton’s Third Army near Fontainebleau, France. As
his battalion approached to cross the Seine River, they
heard the explosion of German forces destroying the
bridge. Desperate for options, he spotted five boats tied
together on the other side of the river. With only one
Maj. Gen. Kelley Lemmon, choice, he swam 350 yards across the Seine, shielded by
member since 1937 ...
cover fire from his troops. He grabbed the line of boats
and successfully swam back to his side of the river with
the boats in tow to establish a bridgehead, which allowed
his troops to cross. “I prayed that the last boat wasn’t tied
down,” recalls Gen. Lemmon. Fortunately, it wasn’t.
He later received the Distinguished Service Cross from
Gen. Patton himself.
We are honored that Gen. Lemmon has been a
... and as a West
Point graduate
USAA member for 73 years. He joined in 1937 with
his first auto insurance policy while a cadet and four years later insured his
first home with USAA. Today he also trusts USAA for banking and other
products, and he has passed the legacy of USAA membership to his family.
“I signed up for USAA with a lot of my classmates because it sounded
like it had a good reputation,” Gen. Lemmon tells us. “I’m glad I did
because they certainly stood by me over the years, especially when my
wife passed away. I’ve always felt that my money was safe and secure, and
I think it’s the way to go for any military family — they can’t go wrong
going with USAA.”
Consider that USAA was founded in 1922, and Gen. Lemmon has been a
member for all but the first 15 years of the association’s history. Serving military
families like his through every stage of life is our aim, and it’s our privilege.
Photography by Paul Elledge; Courtesy
of USAA; courtesy of e-yearbook.com
A very important guest
“I’ve always felt that my money was safe and secure, and
I think it’s the way to go for any military family — they
can’t go wrong going with USAA.” ­— Major General Kelley Lemmon
Josue (Joe) Robles Jr.
Major General, USA (Ret.)
President and Chief Executive Officer
See eligibility information on Page 30.
usaa.com
SUMMer 2010 usaa magazine
3
Summer 2010 | Volume 46 Number 2
A Member’s Guide to Financial Security
USAA
This icon indicates you can find more information at usaa.com.
m aga z i n e
Contents
5
6
8
10
12
25
The front
Money
Cash or Credit,
Minimum Payment Pain
Invest
Schemes and Scams,
The Golden Age
Auto
Trading In, Maintaining
Tires and Fluids
Home
Remodel the Right Way,
House Hunting Online
USAA
Managing Editor
Suzanne McAuliffe
Production and Circulation Manager
Lisa Severson
Vice President, External Communications
Chris Talley
To comment on magazine content
or submit story ideas, call 800-531-8646, or
log on to usaa.com and click Contact Us.
Features
Mission
14
16
20
22
Developing
helpful habits
Can work ever
be optional?
Our Privacy
Promise to You
iN EVERY ISSUE
26 USAA ON THE GO
Share your stories
with other members
27 Member
savings
Tools, Services, Offers
On the cover
C
an Work ever
be optional?
Cover illustration
by Coherent Images;
photo by David C.
Tomlinson/Getty Images
Your
summer
reading list
Editor
Lance Elko
Executive Editor
Alicia Miller
Senior Editor
Melissa Byrd
Assistant Editor
Ben Fromson
Copy Editor
Sarah Lindsay
Contributors
Sara Aase, Mindy Black, Kerry Hannon,
David Plotkin, Mike Sharsky, Logan Ward
Design Director
Larry Williams
Art Director
Lisa Summerell
Account Executive
Robin Sutton Anders
pacecommunications.com
Mortgage
game plan
Senior Vice President, Custom Content
Jacqueline Hughes Ponzoni
Chief Marketing and Sales Officer
Craig Waller
President and Chief Executive Officer
Bonnie McElveen-Hunter
USAA products and services are available
only in those jurisdictions where USAA
is authorized by local law to
promote and sell them.
Mail call
Mail Call
Our New Look
As someone who graduated from
design school, I really appreciate
the professionalism behind your
magazine’s design and layout
(Spring 2010). Way to not have
lame, ugly bank materials.
Kristen Turner, Minneapolis, Minn.
All or part of your letter may be
printed in an upcoming issue.
It may be edited for clarity and
length. The opinions expressed
here are those of individual members and not necessarily of USAA.
If you have comments regarding
an individual claim or concerns
that do not pertain to items in
the magazine, please refer to
usaa.com for a comprehensive
list of contact numbers.
USAA’s mission is to facilitate the
financial security of its members,
associates and their families through
provision of a full range of highly competitive financial products and services; in so
doing, USAA seeks to be the provider of
choice for the military community.
More Lessons to Learn
Sheryl Nance-Nash’s article
(“Recession Lessons,” Spring 2010)
misses the deeper lessons: namely,
that greed, short-term profiteering,
extractive industry, bonuses for
executives of failing companies,
government bailouts, consumer
debt as a way of life, and buying
more than we produce and sell are
unsustainable behaviors leading
not to endless growth but
4 usaa magazine SUMMER 2010
alternating cycles of self-indulgence
and poverty. It seems the recession
has not hit us hard enough yet to
wake us out of our collective
economic-mythological stupor.
The Rev. Anthony E. Cowan, Sarasota, Fla.
At Your Disposal
Thanks for your table on how to
sort household hazardous waste
(“Sorting It Out,” Spring 2010).
Most folks don’t realize that toilets
and sinks aren’t trash cans for
liquid wastes. And many states,
such as Maine, New York and
California, don’t want pharmaceuticals going into the toilet or
trash. In California, we are working
to create more medicine collection
programs. See Earth911.com.
Jennifer Jackson, Oakland, Calif.
USAA Magazine is published quarterly
by USAA as an informational and educational service to members. Material in this
magazine may not be reproduced, stored
in a retrieval system or transmitted in any
form or by any means (electronic, mechanical, photocopy or otherwise) without
permission from the publisher. The post
office does not forward copies from
incorrect addresses. For information about
reprinting material from USAA Magazine,
please write to Lisa Severson at the address
on Page 26. Requests must be in writing.
© 2010 USAA.
USAA with the eagle is a
registered service mark of USAA.
10%
Cert no. SCS-COC-000648
800-531-USAA (8722)
USAA Magazine
In This Section
MONEY
A Member’s Guide to Financial Security
INVEST
auto
home
Car shopping?
USAA can steer
you to the best
deals. See for
yourself: Search
Car Buying at
usaa.com.
Valarie Groves,
member
since 1993
Photography by Kirk Mastin
Driving
Great
Deals
“When I purchased my last car, the salesperson was very pushy
and kept giving me different prices,” says Valarie Groves of Monroe,
Wash. So when that car began to feel too crowded for her growing
family, Groves didn’t want to deal with any more hassles. She turned
to USAA for help in buying a new Ford Flex. “I’m not sure why I
didn’t use the Car Buying Service with any of my past purchases,”
she says. But she’ll definitely use it again. “This was the easiest car
purchase I ever made,” says Groves. “The dealer treated us well,
and we saved around $5,000 — no negotiation needed.”
See important legal information on Page 30.
Talk To Us | TWITTER | FACEBOOK | E-MAIL | call | WRITE | For more details, go to Page 26.
usaa.com
SUMMER 2010 usaa magazine 5
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money
invest
auto
home
Cash or Credit?
Better budgeting doesn’t have to
take an either-or approach.
It’s no surprise cash has gained popularity in the midst of a
credit-hangover recession. But does either method — paper or
plastic — have an edge when it comes to sticking to a budget?
“From the standpoint of recordkeeping, plastic takes the lead
because it gives you such a good money trail,” says Rich Lunsford,
a Certified Financial PlannerTM practitioner with USAA. “But there is
a more tangible feel of spending money when you slide those $20
bills across to a cashier instead of swiping a card.”
Studies have shown that our brains feel the “pain of paying”
with cash more than with credit cards. So we tend to spend more
on a card. On the other hand, says Lunsford, “If you lose your
wallet, there’s no way to recover that cash.” Credit or debit cards are
easily replaced — but be sure to check your card issuer’s policy on
fraud coverage.
“If you’re one of those people whose credit card bill is dramatically more at the end of the month than you’d like, that could be a
sign to try a different technique,” Lunsford says. “It all comes back
to self-discipline. There is no magic wand.”
I don’t carry any cash unless traveling, and
then it is about $40–$60. Otherwise, I use
my debit card for everything. —Denise Knight,
Tolleson, Ariz.­, member since 1997
Each pay period I take out $600 cash for all
my expenses minus bills and house payment.
That’s our spending money. —Crislee Anderson
Moreno, Houston, Texas, member since 2006
Never more than $5, because I end up
spending it on things I don’t need. If it’s on
my USAA card, I think twice before I buy it.
—Ryan Strodthoff, Shorewood, Wis., member since 2008
Certified Financial Planner Board of Standards Inc. owns the certification marks
CFP® and Certified Financial PlannerTM in the U.S., which it awards to individuals who
successfully complete CFP Board’s initial and ongoing certification requirements.
Taking Trust
Seriously
USAA ranked in the
2010 top 10 list of the
United States’ Most
Trusted Companies
for Privacy, according to a survey by the
Ponemon Institute,
a privacy and
information security
research company.
USAA ranked No. 9
for the second year in
a row, up two spots
from 2008. A recent
survey conducted
by USAA found
41 percent of members
trust USAA more than
all other companies,
up from 27 percent
in 2007.
Read USAA’s privacy
promise to you on Page 25.
Peace of Mind
Overdraft protection options from USAA Bank
can be a welcome safety net. If you accidentally
overdraw your checking account, the Bank will
automatically transfer funds from a designated
account, such as a savings account, to cover
the balance. To sign up, log on to usaa.com,
click on your checking or savings account to get
to the Account Summary page, and click the
link under Overdraft Protection.
6 usaa magazine Summer 2010
800-531-USAA (8722)
Illustration by Jacob Thomas; Photography courtesy of USAA Members
the
Find the Real Cost
With credit cards, paying the
least means spending the most.
You’ve heard that paying just
the minimum credit card balance
can cost you. But how does the
math play out? The chart on the
right lays it all out.
While the math is straightforward, your situation may be
more complex. For example, you
might have one credit card with
different annual percentage rate
calculations for cash withdrawals,
convenience checks, balance
transfers and purchases. If you make the minimum
payment on a card like this, be
aware of where your money is
going. “Minimum payments in the
credit card industry are typically
allocated from lowest to highest
APR,” says Ryan Everett, USAA’s
assistant vice president of credit
cards. “Payments in excess of the
minimum pay down the highest
rate first.”
Let’s say you have a balance
with a 0 percent interest rate
and another balance on the
same card with a 15 percent
rate. Your minimum payment is
$100, but you send in $150. Your
payment assigns $100 toward
the 0 percent balance and $50
toward the 15 percent balance.
a matter of time
How long will you be
paying for those new
shoes if you pay the
minimum balance? In
this example we use a
$1,000 balance and a
2 percent minimum
payment and assume no
new charges are made.
= one year
10% APR
15% APR
20% APR
91 months,
or 7 1/2 years,
to pay off
121 months,
or 10 years,
to pay off
213 months, or
almost 18 years,
to pay off
Minimum payment calculated as the
higher of 2% of balance or $15
Find out if you’re paying
enough on your debts to
maintain a healthy financial
picture. Go to usaa.com
and search Debt Analyzer.
Photography by David Lees/Getty Images
Those new shoes
could end up
costing more than
you bargained for.
usaa.com
Summer 2010 usaa magazine 7
the
FroNT
money
invest
auto
home
Have Investments? ORGANIZE!
A fragmented portfolio can strain your financial health.
Getting your financial house in order can pay off.
If your retirement investments are scattered helterskelter, it’s nearly impossible to get a grip on what
you have and what investment areas you might
need to pare back or build up.
»One way to cut through the clutter is to
consolidate your investments into one brokerage account. Your first step to streamlining might
be to combine existing retirement accounts into one
IRA brokerage account.
»Think of a brokerage account as a financial
hub. It allows you to invest in a wide variety of
investments, including mutual funds.
»USAA has a variety of brokerage accounts
to help meet your needs: a standard brokerage
account that requires no minimum balance;
an asset management account, which requires a
minimum balance of $5,000 and offers a
cash rewards debit card; and three types of
retirement accounts.
»The advantage of a single master account:
It’s easier to manage your money. Once you
consolidate, the advice you receive is based on your
entire portfolio — not just a piece of it. Plus, you
could pay less in account maintenance charges.
Investments/Insurance: Not FDIC Insured • Not Bank Issued,
Guaranteed or Underwritten • May Lose Value
Investing in securities products involves risk, including
possible loss of principal.
There may be tax consequences associated with the transfer of
assets. Indirect transfers may be subject to taxation and
penalties. Consult with your own advisors regarding your
particular situation.
See additional legal information on Page 30.
Legal — But Caution Advised Pyramid schemes are illegal, but several
well-known multilevel marketing or home franchising companies maintain
legitimacy because commissions dispersed to the pyramid come from
the sale of goods, not membership or initial investment.
In today’s economy, shrinking returns and stock market losses have made
many investors curious about other opportunities to bolster their nest eggs.
But be on guard: Some investment opportunities, especially those offering
large and/or guaranteed returns, may be scams.
Solicitations for these investment strategies might reach you by phone,
e-mail or your mailbox, so be mindful of misleading sales tactics. Free-meal
seminars are a common method to gain a client base. Once you’re inside,
pushy salespeople use pressure sales tactics to entice you without proper
documentation or full disclosure of the fees and commissions associated with
the investment. Another tactic used frequently to scam prospective investors
is guaranteeing a specific rate of return. Be suspicious of anyone who
guarantees that an investment will perform a certain way. All investments
carry some degree of risk.
USAA members should be wary of schemes that prey on associations with
the military. Ponzi schemes, in which early investors are paid off with funds
from later investors, may target ethnic, religious or other affinity groups.
What can you do to protect yourself? Tom Shaw, USAA vice president for
Enterprise Fraud and Anti-Money-Laundering Management, advises taking
the scam and risk tests available at FINRA.org to assess your vulnerability.
You’ll also find information on current scams.
8 usaa magazine SUMMER 2010
800-531-USAA (8722)
Illustration by Jacob Thomas
Don’t Be Easy Prey
The Gold Rush
Per-ounce value of this precious metal
has reached record levels. If you invest,
use a balanced strategy.
Looking at the value of gold over the past 30 years, you might think it’s
a solid investment — and you’d be right. But keep things in perspective.
Historically, the value of gold has moved independently of stocks, bonds
and the dollar. “It does its own thing, so it provides portfolio diversification,”
says Dan Denbow, assistant vice president and co-manager of the USAA
Precious Metals and Minerals Fund.
Investors are looking at gold to continue to shine. You can buy coins
or bullion; an exchange-traded fund that invests in gold; or a mutual fund
that invests in gold-mining companies. Keep in mind, though, that the
value of mining companies increases faster than the value of gold
itself — and decreases faster. “Because of that volatility, we typically
tell people to limit their exposure,” says Denbow. “If you buy too
much of it, it could dominate performance and you may lose
diversification benefits.”
The price of Gold over the last 35 years
1105.45
1200
1000
800
600
400
200
0
1975
1980
1985
1990
1995
2000
2005
2009
Photography by Photodisc/Getty Images
Past performance is no guarantee of future results. As interest rates rise, existing bond prices fall.
Consider the investment objectives, risks, charges
and expenses of the USAA mutual funds carefully
before investing. Contact us at 800-531-8910 for a
prospectus containing this and other information about the
funds from USAA Investment Management Company,
Distributor. Read it carefully before investing.
The USAA Precious Metals and Minerals Fund is subject to additional
risks, such as currency fluctuation, market liquidity, political instability
and increased price volatility. It may be more volatile than a fund that
usaa.com
diversifies across many industries and companies.
Exchange Traded Funds (ETFs) are subject to risks similar to those of
stocks. Investment returns may fluctuate and are subject to market
volatility, so that an investor’s shares, when redeemed or sold, may be
worth more or less than their original cost.
Investing in securities products involves risk, including possible
loss of principal.
Diversification does not guarantee a profit or prevent a loss.
SUMMer 2010 usaa magazine 9
the
FroNT
money
invest
Auto
home
Get the Most
for Your Trade-in
A small investment of time can have a big payoff.
For a convenient alternative to selling your car
yourself, consider a dealer trade-in when you purchase your next vehicle. You’ll make less money, but
it will save you time — and there are tax advantages.
Here are some tips to ensure you get a good deal.
1
2
Research your vehicle’s trade-in value to get an
idea of how much money your car is worth.
Be realistic about what type of car the dealer
might want to put on the lot. If it’s a car the dealership sells, and your car has curb appeal, you’ll likely
get a higher offer. If not, don’t expect more than the
dealer would get at auction.
3
Detail your car before you take it to the
dealership for evaluation. Wash and wax the
exterior. Spray engine degreaser on the engine.
Clean battery-terminal deposits with a baking soda
and water mixture. Top off fluids; vacuum and clean
upholstery; and wash windows.
4
5
Have a mechanic certified by the National
Institute for Automotive Service Excellence
check the vehicle to make sure it operates properly.
Make sure everything looks good. The tires
should match. The windshield and windows
should be free of cracks and chips. The paint should
match and have a smooth surface.
Find your car’s trade-in value. Go to
usaa.com and search Car Buying Service.
Lock in a Low Price USAA makes every stage of car ownership easier, from the moment you start
shopping. The USAA Car Buying Service1 offers members a guaranteed low price2 from approximately
2,500 participating dealers. Members also can get an extra $750 off3 select GM models.
Insurance and financing options4,5,6 are also available — just go to usaa.com and search Car Buying Service.
See important legal information on Page 30.
Summer is the heaviest driving season, so stay safe
on the road — and get more out of your tires.
Pressure
Tread
Alignment
Rotate
Underinflation is a
leading cause of tire
failure. Check your
pressure at least once a
month; the correct
pressure is listed in
your owner’s manual
and on a label typically
found on the driver’s
doorframe. Don’t forget
to check the spare.
Watch for tread-wear
indicators — raised
sections that become
visible when tread has
worn down to onesixteenth of an inch.
And consider the penny
test: Slide a penny in
the tread with Lincoln’s
head upside-down and
facing you. If you see
the top of his head, it’s
time for new tires.
Uneven wear and
bald spots on your
tires indicate your car
is out of alignment.
Have your wheels
aligned and balanced
to increase the life of
your tires and prevent
your car from pulling
to the left or right.
Even properly inflated
and aligned tires can
wear unevenly. Not
everyone takes the same
turn at the same speed,
and some people make
more right turns than
left ones or vice versa. If
you don’t rotate your
tires, you’ll be spending
for new ones more often
than you should. Rotate
every 5,000 miles.
Sources: National Highway Traffic Safety Administration and the Rubber Manufacturers Association
10 usaa magazine SUMMER 2010
800-531-USAA (8722)
Illustrations by Oliver Munday; photography by getty images
4 Tire Safety Tips
On the Level
Take a quick look under your hood to
prevent travel aggravation and expense.
Power
Steering Fluid
Windshield
Washer Fluid
This may be
the cheapest
element in a
power steering
system — but it’s
perhaps the most
critical. Without
it, steering is
almost impossible. Find the
labeled reservoir
and make sure
fluid reaches the
fill line. Change
the fluid when you
change coolant.
The simplest
change of all, it’s
also imperative —
especially when
you can’t see
because of dirt
buildup. Use the
real thing — not
water. Check the
level frequently,
especially if
you’ve done
highway miles or
have driven under
severe weather
conditions.
Fueling up at the gas pump may not be something you
give a lot of thought to: Open cap, insert nozzle, pull
trigger, wait, replace nozzle. Checking your car’s fluids
isn’t quite that simple, but it can be critical to your
automobile’s health.
Motor Oil
Brake Fluid
Many experts
recommend a
change every
5,000 miles vs.
the traditionally
advised 3,000.
Why? Modern oils
are more resistant to thermal
breakdown than
the oil used just
a decade ago.
And replace your
oil filter — used
filters retain
contaminants
that can harm
your engine.
Pop your hood
and check it
yourself. If the
fluid is low, top it
off and have your
brake system
checked; you may
have a leak. Some
manufacturers
recommend a
change every
30,000 miles.
Transmission
Fluid
Experts typically
recommend a
change once
every 30,000
miles. Good
advice: Be sure
to consult your
owners manual
regardless of the
conventional
advice you might
hear from friends
or find online.
Coolant
Flush and refill
every other year,
at least. Coolant
contains additives
that fight rust
and corrosion.
But as the coolant breaks down
over time, it turns
acidic, which
then creates
metal corrosion.
New extendedlife antifreezes
claim five-year
or 150,000-mile
protection.
Illustration by Celia Johnson
Maintenance
recommendations
vary widely by
car manufacturer.
Check your owners manual for
all maintenance
needs. Not a
do-it-yourselfer?
Most oil and lube
shops will check
and top off fluids
as part of their oil
change service.
usaa.com
Summer 2010 usaa magazine 11
FroNT
money
invest
auto
home
Think Smart
Before Remodeling
A little planning can ensure great results.
Few houses can keep pace with our changing needs and wants, so many
of us grapple with renovating when little quirks turn into big bothers. “Get
the most out of a renovation by knowing your goals before you start,” says
J.J. Montanaro, a Certified Financial PlannerTM practitioner with USAA. Good
investments mean different things to different homeowners, but here are
some easy ways to help you decide what’s best for you — and your wallet.
»Set your priorities. If this is the house you plan to stay in for the long
term, itemize your wish list and create a timeline. Consider what makes sense
for life transitions — kids going to college, parents getting older. If you only
plan to stay in it for a few years, choose budget-conscious upgrades, such as
a new front door, that add curb appeal so you can recoup your investment.
» Create a sensible budget. Put pen to paper to avoid overlooking details,
and add a 15 percent cushion for unexpected expenses that crop up. Cash
is king, of course, but a home equity loan or line of credit can allow you
to borrow money using your home’s equity as collateral. Don’t start down
a path you can’t finish; you want a project you can live with financially.
That also means contacting your insurer to make sure you have enough
homeowners coverage to fully rebuild your home, including your new
upgrade, in the event of a catastrophic loss.
»Shop around for the best deal. Get multiple bids no matter the scope
of your project. Interview contractors, and compare costs of materials and
labor — price quotes can vary a great deal. Consider energy-efficient products; you may be eligible for federal tax credits, state incentives or rebates
from your local energy provider — visit EnergyStar.gov for details. If there
are projects you can do, ask for bids omitting those project areas to see if
the savings warrant breaking out the toolbox.
say goodbye
to your PMI
If you recently
bought a home with
a down payment of
less than 20 percent,
you’re likely paying
Private Mortgage
Insurance. PMI pro-
tects a lender against
loss if the borrower
defaults. Once you’ve
gained 22 percent
equity based on your
original home purchase price, the PMI
charge will disappear.
take note: You can
request cancellation
at 20 percent equity.
If you’re behind on
your payments or
have other liens on
your home, you may
not qualify. Check
with your mortgage
service provider if
you have questions.
Certified Financial Planner Board of Standards Inc.
owns the certification marks CFP® and Certified
Financial PlannerTM in the United States, which it awards
to individuals who successfully complete CFP Board’s
initial and ongoing certification requirements.
12 usaa magazine Summer 2010
800-531-USAA (8722)
Photography by Rick Gomez/Corbis
the
Find Your
Perfect Match
If you’re house hunting online,
here’s some must-read advice.
Buying a home is one of the biggest financial
decisions you’ll ever make. Even if you plan to
work with a real estate agent, the Internet can
give you a leg up by helping you educate
yourself and search for properties. Follow
these tips when house shopping online:
» Do the math. The Federal Home Loan
Mortgage Corporation, commonly known as
Freddie Mac, offers online resources to get you
started. Online calculators such as those at
usaa.com/Mortgage are a great starting point
when determining how much house you can
afford, but also consider other expenses like
utilities and maintenance.
» Hone your house search. You know what
rmer
True Choant property
Lakefr , 3 bth
s
5 bdrm
FIT
A PERFEnCeTighborhood
Quiet , 2 bth
s
3 bdrm
rsy typbearn
Outdoo
h
res wit
10 ac
s, 2 bth
3 bdrm
kind of house you want. The Internet will help
you narrow down the options. Use tools such
as a Multiple Listing Service — coming soon on
usaa.com — to search for homes based on
number of bedrooms, price range, proximity to
schools or military bases, and other variables.
» Map it. See something you like? Type
the home’s address into an online mapping
service and zoom in for a closer look. The
satellite view will help you locate fence lines,
outbuildings and landscape features, which
are often left out of real estate listings.
Switch to street view, and take a virtual tour
of the neighborhood. Check out the condition
of the neighboring houses, and look for power
plants, empty lots and other eyesores.
Fall in love
with a stately
Colonial or a
cute Cape Cod.
Illustration by Robert Dale
USAA is here to help you every step of the
way, from finding and financing to insuring
and maintaining your home. Visit
usaa.com and search Home Solutions.
Your Dream Home at Your Fingertips Coming soon, you can find the perfect home with usaa.com and your
mobile device. » Imagine the possibilities. Get access to the same information real estate agents use about millions of
homes for sale and apartments for rent in the United States. » Make it personal. Whether buying or renting, search for the
right neighborhood by comparing schools, proximity to military bases or businesses, crime rates, and amenities like shops and
restaurants. Soon, you’ll be able to take your own photos and upload them to usaa.com from your mobile device to refer to
later. » Lean on a pro. Your local USAA MoversAdvantage®7 real estate agent, selected to meet your needs, can walk you
through the whole process and explain how you can get up to a $3,100 member cash bonus for buying and selling.
See important legal information on Page 30.
usaa.com
Summer 2010 usaa magazine 13
Read more from
Jean Chatzky and
learn about the
Debt Diet online at
JeanChatzky.com.
Find Your
Financial Mojo
Anyone can develop these eight habits — including you.
Photography By David Yellen
By Jean Chatzky
14
usaa magazine sUMMER 2010
800- 531-USAA (8722)
Expert Advice
Did you know that when you look at the top 30 percent
of the population of America in terms of wealth and success,
nine out of 10 of those folks weren’t there a decade ago?
I learned in conducting a study
of 5,000 Americans for my book The Difference. I also
discovered that there are eight traits and habits that separate
those successful folks from those who haven’t found their
financial mojo — and that these are not traits or habits you
have to be born with. They’re especially helpful in tough
economic times, which is why they are especially pertinent
to many of us. Pick two or three of the items on the list
below and make them your own — they’ll show you the
way to financial success.
That’s one of the things
1
Optimism. People who understand the keys to success
have a sunnier outlook. When they rank their own
happiness, they’re an eight out of 10, which makes them
cynical enough to purchase life insurance and have emergency
funds, but bright-sided enough to get more job interviews,
land jobs and get solid performance evaluations.
Resilience. As with optimism, we’re born with about
50 percent of the resilience we’ll ever get, according to
research from the University of Pennsylvania. The rest is up to
us. And in these uncertain times we’ve never needed it more.
To up your resilience, when comparing yourself to others (we
all do this), put yourself in a good light rather than a poor one.
For example, I’m not the least flexible person in yoga class. I
am among the most flexible of the beginners.
Passion. There are jobs that you do for money. There
are careers, which offer money plus advancement. And
there are callings, which are those things you have to do.
Americans on average have 12 different jobs and four different
careers over their lifetimes. The wealthy have fewer, and I
believe it’s because they’ve found their callings, their passions,
and are sticking to them — and there’s a great financial
advantage to that path. To find your passion, ask yourself:
What is it people say I do well? What am I doing with my
time? And if that doesn’t work: What turned me on as a
child — and does it have a corollary in the adult world?
Connectedness. People who live paycheck to paycheck keep close ranks socially. They tend to stick to family
and close friends. The wealthy open their circles to anyone —
neighbors, colleagues, friends of friends — who might be an ally
financially or in business. That means not only joining the
appropriate groups, but putting yourself out there as a leader.
2
3
4
usaa.com
5
Intuition. Our brain stores information that tells us if
something happens, something else could follow. When it
senses a pattern, it sends signals we often feel in our guts. We
call them hunches. What they are is intuition, a sense that’s
usually well developed in the wealthy. To make yours work for
you, figure out what it’s saying. Not sure? Try this: When faced
with a tough yes-or-no decision, flip a coin. Assign the yes and
no to head or tail. While the coin is in the air, you’ll hope that
it lands one way or the other. That hope is your intuition.
6
Saving habitually. The wealthy credit their financial
success to saving habitually (even more than to investing).
This isn’t the easiest habit to learn, because your brain is
hard-wired to value today’s purchases more than those put off
until tomorrow. That’s why saving is best accomplished
automatically. Whenever you get paid, make sure money automatically moves into your retirement account, as well as into
discretionary savings. Then watch your savings grow. Your
brain will learn to take pleasure in that.
Investing in stocks. Even in tumultuous markets,
the wealthy invest in stocks. They understand the need to
take risks with their money in order to give it the ability to
work as hard as they do. But this shouldn’t be done blindly.
You need an asset allocation that’s in sync with your age and
risk tolerance. If you don’t feel comfortable developing this
yourself, a target-date fund tied to the approximate year you
expect to retire can keep you in balance.
Gratitude. Finally, the wealthy understand the
importance of giving back — and being thankful for what
they have — to tie it all together. Gratitude is the antidote to
materialism. Materialism is obsessing on what you desire.
Gratitude is appreciating what you have. To get more of it into
your life, use these words daily: grateful, thankful, gift, lucky,
fortunate. You’ll start feeling richer in no time. »
7
8
Need help getting started? USAA’s experts can help
you create a personalized financial plan that suits
your goals. Call 800-531-8722.
Investment and insurance products are not deposits, not insured by FDIC
or any government agency, not guaranteed by the Bank.
Investment and certain insurance products may lose value.
Investing in securities products involves risk, including possible loss of principal.
See additional legal information on Page 30.
sUMMER 2010 usaa magazine 15
retirement Planning
Making Work
Optional
Can you ever afford to do what you
really want to do? Our expert tips might
help you reach retirement after all.
By Sheryl Nance-Nash and Jennifer Chappell Smith
» Illustration by Dieter Braun
Plan Now
16 usaa magazine Summer 2010
J
ust about everyone
they’ll
have enough cash to say,
“So long, Boss.” But in this
economy, is it still possible?
With layoffs, stock market losses
and rising health care costs, you
may wonder if you’ll be working
forever. Take heart. There are
steps you can take to get closer
to a permanent quitting time.
imagines a day
Play Later
summer 2010 usaa magazine 17
retirement Planning
We asked USAA members how prepared they’ll be to
quit their day jobs when they want to.
Sara Harris, 25, says she’s determined she and husband
Jeremy will meet their target retirement ages: 70 for him and
68 for her. So she invests in a target mutual fund and plans
to open an IRA in 2011. Bonnie Schoen retired at 58 after 34
years as an Internal Revenue Service agent. “I was very lucky
working as a government employee,” she says. With a
$4,000-a-month government pension and her husband still
working as a dentist, she’s definitely one of the fortunate ones.
She now enjoys devoting time to volunteer work. Your
situation likely falls somewhere between these two.
Action items assigned to fellow USAA members by USAA’s
June Walbert, a Certified Financial Planner™ practitioner,
and Laurel Bragg, a Chartered Retirement Planning
CounselorSM, might help you reach your retirement goals, too.
The Young Optimists
Chris and Mitzi Hoy
Paycheck: Chris, 26, is a draftsman and also delivers pizza;
Mitzi, 28, works about 30 hours a week at a day care center.
Target Retirement Age: Partial retirement at age 65.
Retirement Strategy: “If we start saving now, our money will
Jeremy and Sara
Harris, members
since 2006
have a chance to grow over time,” Chris says.
Financial Snapshot: Paying medical bills, a $6,500 student
loan and $13,000 in credit card debt; starting a $1,000 emergency fund; skipping “the latest and greatest stuff.”
Learning From Them: Mitzi converted an old 401(k) to a
Roth IRA — allowing the money to potentially grow tax free.
With $182,000 left on their mortgage, Chris and Mitzi vow not
to take on new loans and plan to pay cash for their next car.
Chris’ extra salary goes to medical bills and the emergency fund.
Action items
q Identify the origins of the credit card debt and tackle them
first. Deduct interest from the student loan and pay it off next.
Then ramp up savings and long-term investments.
q Keep emergency funds in a high-yield, interest-bearing
account and build up at least six months of living expenses.
q Factor in the cost of the kids they plan to have. The United
States Department of Agriculture estimates that a couple with
two children will spend $210,340 to $483,750 raising their
younger child from birth in 2008 to age 17 in 2025.
Feeling Behind the Curve
Paul and Tammy Heinzman
Sara Harris recently began selling her art
online at artsafire.etsy.com. So far, she’s made
about $8,000. “Right now, I’m putting
that money back into the business,
but down the road, all the money will
go toward retirement,” she says. Saving
while her husband, Jeremy, is working part time
is a challenge, but they’re willing to pay now
in order to play later.
Tammy, 47, is an office manager; both work weekends at their
own small cleaning business.
Target Retirement Age: “I don’t think I will ever not work,”
says Paul.
Retirement Strategy: They’re playing catch-up, but Paul’s
unsure how much is in his current 401(k). He’s not alone. Less
than half of workers say they’ve tried to calculate how much
money they’ll need by retirement, according to the Employee
Benefit Research Institute’s 2010 Retirement Confidence Survey.
Financial Snapshot: Paying about $500 a month on more
than $13,000 in credit card debt; anticipating their 17-year-old’s
college costs; corralling 401(k)s left behind at old jobs.
Learning From Them: Although they’re way behind in
retirement savings, there’s hope. Facing reality is a key first
step. Working weekends shows a willingness to increase cash
flow. And Paul has resumed contributions to his 401(k).
Action items
q Clarify retirement income needs. Paul guesses $250,000
18 usaa magazine Summer 2010
800-531-USAA (8722)
Photography by Ed Mcculloch
Paycheck: Paul, 52, is a personal computer technician, and
for retirement will do. But that amount covers little more
than health care costs in retirement, even with Medicare,
Walbert says. The Retirement Income Planner tool at
usaa.com could help target a more accurate figure.
q Consolidate 401(k)s by rolling over balances to a traditional IRA instead of a Roth IRA. Paying taxes upfront on a
Roth IRA may benefit some, but this couple should first pay
off debt and save more.
q Identify budget busters. The USAA® Money Manager tool
on usaa.com can help find areas to trim.
q Prepare their daughter to help bear college costs.
“Their own future has to be the priority,” Walbert says.
“Financial independence in retirement is the best gift
parents can give kids.”
Eyeing the Exit
Depending on your situation, consider these options:
q Contribute only enough to capture the match
to your 401(k) and then start a Roth IRA. The
Roth’s potential tax-free growth complements
the free money today from the employer match.
q Guard against assisted living and nursing
care costs with long-term care insurance.
q Use some savings to buy a fixed annuity that
provides a steady income stream.
Using Military Might
Maj. Philip F. Romanelli
Paycheck: Romanelli, 40 and single, works for the
Department of Homeland Security, but he’s also a major in the
Army Reserves and currently deployed at the Pentagon.
Target Retirement Age: 70. “My hope is to be able to
retire before I plan to retire.”
Retirement Strategy: “I have a fairly long-term outlook
and remain pretty aggressive with investments.”
Financial Snapshot: Rents for now; tries to pay off credit
cards each month; drives a paid-for car; has an $11,000
student loan; spends some savings for leisure travel.
Learning From Them: He contributes to both a federal
government and a military Thrift Savings Plan, benefiting
from the match the government offers. He also invests in
mutual funds and strategizes even moderate financial
decisions, such as a pending car upgrade.
Action items
q Bump up the savings percentage in his Thrift Savings
Plan as he gets raises.
q Think about working more conservative bonds into his
aggressive investment mix.
q Fees matter: There’s a benefit in expert management,
but find value with no-load funds and low-cost
managed portfolios. »
Photography by Matthew Mahon
Check your retirement readiness.
Visit usaa.com and search
Retirement Income Planner.
Investing in securities products involves risk, including possible loss of principal.
Investments/Insurance: Not FDIC Insured · Not Bank Issued, Guaranteed or
Underwritten · May Lose Value
There may be tax consequences associated with the transfer of assets. Indirect
transfers may be subject to taxation and penalties. Consult with your own
advisors regarding your particular situation.
The fixed annuity guarantee against principal loss depends on the claimspaying ability of the insurance company.
There are costs associated with annuities, including surrender fees, early
withdrawal penalties and mortality risk expenses.
Annuities do not provide any tax-deferral advantage over other types of
investments within a qualified plan.
usaa.com
Paul and Tammy
Heinzman, members
since 2001
“Hopefully I’ll be able to work less than
20 hours a week at some point and do
something less stressful. But I don’t
think retirement as our parents
knew it exists,” Paul Heinzman says.
summer 2010 usaa magazine 19
good reads
What’s in Your
Beach Bag?
On a sunny summer day,
there’s nothing better than
lounging poolside or on the
beach with a good book.
In response to a USAA
Facebook® request, members
listed these as their favorites.
Vote for your favorites
at Facebook.com/USAA.
Ann Wilson Brennan
The Guernsey
Literary and
Potato Peel Pie
Society is one of
the best books I
have read in years.
Written in a series
of letters, it is like
stumbling on your
grandparents’
life story in a box
in the attic. Just
incredible.
20 usaa magazine Summer 2010
Army Reserve
National Guard
Lt. Angela Gil
member since 2005
WWII Behind
Closed Doors by
Laurence Rees has
compelling stories
and personal
accounts of insiders
during some
secret deals of
WWII. The book
reads like a
gripping novel.
Outstanding
writing!
Jackie Ball
member since 1969
I’m not a dog
owner, but I loved
The Art of Racing
in the Rain by
Garth Stein. Hard
to believe a book
told by a dog could
be so good!
Photography By Mark Wagoner; courtesy of USAA Members
member since 1986
Other
Favorites
from USAA
Members
Ken McNair
member since 1961
Being an old MATS/
MAC navigator, I
enjoyed reading
Andrei Cherny’s
book The Candy
Bombers: The
Untold Story of
the Berlin Airlift
and America’s
Finest Hour.
FICTION
Pride and
Prejudice
by Jane Austen
To Kill a
Mockingbird
by Harper Lee
Gone With
the Wind
by Margaret Mitchell
North and South
by John Jakes
Ender’s Game
by Orson Scott Card
The Eyre Affair
by Jasper Fforde
BIOGRAPHY
John Adams
by David McCullough
Ty Davison
member since 1992
The Guns of
August by
Barbara Tuchman
is a Pulitzer
Prize winner. It’s
accessible historical
nonfiction and was
reportedly JFK’s
favorite book.
MILITARY
Standing
Into Danger
by Cassie Brown
Lone Survivor
by Marcus Luttrell
Tears in the
Darkness
by Michael Norman
and Elizabeth
M. Norman
MEMOIR
Eat, Pray, Love
by Elizabeth Gilbert
From Baghdad
With Love
by Jay Kopelman
Kandra Conary
member since 2006
The Total Money
Makeover by Dave
Ramsey has a very
no-nonsense way
of explaining how
to get out of debt.
We have recently
used his methods
to pay off all of our
consumer debt and
are on our way to
being debt free!
LEADERSHIP
Leadership: The
Warrior’s Art
by Christopher D.
Kolenda
FINANCIAL
Rich Dad
Poor Dad
by Robert T. Kiyosaki
SELF-HELP
Feel the Fear
and Do It Anyway
by Susan Jeffers
The 4-Hour
Work Week
by Timothy Ferriss
summer 2010 usaa magazine 21
Mortgage Advice
Home Matte
22 usaa magazine Summer 2010
800-531-USAA (8722)
W
are dealing with
the fallout from underwater mortgages,
others may have a happier outlook:
paying off a mortgage ahead of time.
If you imagine a football field, 100 yards
from goal line to goal line, you are
somewhere on that field in terms of your
mortgage balance owed. Those who
recently purchased a home, many of
whom are younger, are likely sitting
somewhere on a yard marker well shy of
midfield. Others who are in, say, the
seventh or eighth year of a 15-year note
might be on the 50-yard line. And those
nearing the goal line are about to own
their home outright.
Whatever your situation, there’s a
good deal of expert advice that applies to
your position on the field. First, if you’re
backed up to your own goal line, consider
this counsel from finance guru Jane
Bryant Quinn: If you’re paying on a
house that’s worth less than the original
price, keep paying. It might be a slow
recovery. But remember that with each
payment you’re gaining more equity. You
might be gaining very short yardage each
month, but you are moving toward a first
down with each payment.
Do your best not to give up on your
house. Quinn notes: “If you walk away
from the house, you’ll wreck your credit
rating.” Best-selling author, radio host and
TV personality Clark Howard offers the
same caution. He says that executing a
short sale (selling the house for less than
it’s worth), foreclosing or declaring
bankruptcy will devastate your credit
score. Bankruptcies will stay in your
file for a full decade. June Walbert, a
Certified Financial Planner™ practitioner with USAA, couldn’t agree more.
Photography courtesy of Jane Bryant Quinn; courtesy of
Clark Howard; courtesy of USAA; courtesy of Dave Ramsey
While many of us
rs
usaa.com
“You made a personal commitment to
buy a home and to pay for it. When you
walk away, those losses don’t simply
disappear. They are passed along to other
consumers in various fees and interest rates.”
On the bright side, if your loan is through
the Federal Housing Administration,
be aware of a plan announced earlier
this year that offers relief to borrowers
who have 1) lost a job, 2) suffered a
dramatic reduction of income, and
3) undergone a significant life change.
Appealing to the FHA may get you
temporary relief on payments or
a lower interest rate on your loan.
IT’S A HOUSE, BUT
IT’S ALSO YOUR HOME
A common belief that emerged in the
past couple of decades is that buying a
home should be an investment. That’s
true – but only to a point. Quinn
observes that historically home prices
have remained relatively flat over time,
rising a little with the long-term inflation
rate. She offers some good old-fashioned
advice: Think of your home not as an
investment vehicle but rather as a comfortable place to live. “Buy a house for your
personal comfort and pleasure, and keep
your money in a 401(k) or IRA,” she advises.
And if you’re thinking of flipping a house
for a profit, now may not be the best time.
Jane Bryant Quinn
financial author
and commentator
Clark Howard
financial author
and radio/TV host,
member since 1976
June Walbert
Certified Financial
Planner™ practitioner
with USAA,
member since 1991
APPROACHING THE GOAL LINE
Once you’re past midfield, the goal posts
look larger – they’re well in sight. And
that’s where every homeowner would
love to be. So do you sprint for the goal
line? Do you pay off that mortgage? It
depends on whom you ask. To some, it’s a
straight-up yes or no answer. Others,
Dave Ramsey
financial author
and radio/TV host
A mortgage is your greatest monthly expense. So what’s
the best advice? Plod along? Pay it down? Pay it off?
The experts weigh in. By Kathy Yakal » Illustration By L-Dopa
summer 2010 usaa magazine 23
Mortgage Advice
acknowledging the complex nature of
the question, say it depends on your
particular situation. So ponder the input
you’re likely to get from your broker,
your accountant and your brother. But in
the end, your decision should emerge from
a close examination of your needs, your
goals, your risk tolerance and, of course,
advice from personal finance professionals.
While many of us are not flush enough
with cash to make that touchdown run,
do it if you’re able. “A mortgage can be a
necessary expense, because let’s face it:
Most of us can’t come up with hundreds
of thousands of dollars to pay cash for a
home,” says USAA’s Walbert. And we get
a tax benefit for that mortgage, she adds.
But does carrying a mortgage make
sense just for the tax benefit? Not really.
Dave Ramsey, the best-selling author
of several personal finance books and
host of The Dave Ramsey Show, advises
homeowners to attack their mortgage
“with gazelle intensity.” He writes, “Every
dollar in your budget that you can find
above living, retirement and college
should be used to make extra payments
on your home.”
But, again, what about the appeal of a
tax deduction offered by paying mortgage
interest? Sure, it’s a nice break and great
incentive for owning a home, but consider
this simple example from Quinn’s new
book, Making the Most of Your Money
Now. If you paid $10,000 in mortgage
interest last year and you’re in the 25
percent tax bracket, you took a deduction
of $2,500 on your 1040. That’s a difference
of $7,500. With your mortgage paid off,
you wouldn’t be shelling out the $10,000
in interest. You’d pay $2,500 more in taxes
because you’d have lost the mortgage
interest deduction – but the remaining
$7,500 would be yours. Walbert notes,
“Tax savings does not zero out interest
expense. If you can, pay it off.”
Howard goes a step further, saying,
“The mortgage interest deduction is
so oversold. Unless you are earning in
excess of $209,000 per year, the deduction
GAME PLAN NOTES
» Avoid hidden costs when making biweekly payments. Clark Howard
notes that some lenders will offer to convert a monthly payment schedule
to biweekly for an upfront fee of $200–$400. The idea, of course, is to
lessen the number of months or years of your mortgage. Instead, Howard
says, add one-twelfth of your annual payment to your monthly mortgage
bill. You’ll accomplish what the biweekly schedule sets out to do — and
save the fee. Or, June Walbert notes, if paying half the mortgage twice a
month is more budget friendly, it may be worth pursuing.
» If possible, stay away from reverse mortgages. In really tough
circumstances, taking a reverse mortgage might be a lifesaver. But,
cautions Dave Ramsey, as appealing as they might seem, they basically
encourage homeowners, particularly the elderly, to go into debt. Many of
the rates and fees, he notes, are astronomical. And some reverse mortgage
offers are fraudulent. Ramsey points out that the Federal Trade Commission
has listed some of these offers as one of the main types of fraud.
» Take home equity loans to pay off credit cards? No. It sounds great
on paper: Get rid of those nagging credit card bills with a lower-interest
home equity loan. But, Howard observes, there’s a human behavior factor
involved here. With credit card balances of zero, it’s far too tempting to
accumulate charges all over again. He cautions: “Do not use borrowed
money to achieve a desired lifestyle.”
» Pay off your mortgage early? Look closely. Before you spend
any time thinking about paying off your loan in full, check the fine
print on your contract. Mortgage contracts may include a prepayment
penalty clause.
24 usaa magazine Summer 2010
has little value.” He reminds us that you
first have to overcome the standard
deduction of $11,400 before you save a
penny of tax from paying a mortgage.
Then your savings are based on your tax
rate, which is currently at 33 percent for a
married couple earning more than $209,000.
BUT, BUT, BUT …
Most personal finance experts agree:
Debt is not a desirable thing. But there
are varying degrees of “desirable.” In the
hierarchy of debt worthiness, mortgages
come off looking pretty good. Mortgages
fall into the good debt category because
the interest is tax deductible, along with
the added benefit of building equity over
time in your home, says Walbert. Other
debt should be paid off first, including
credit cards (even those with 0 percent
interest), personal loans and cars.
“If your retirement is squared away
and you have extra money, I say pay off
the mortgage,” she advises. “Retiring
mortgage-free comes with major peace of
mind. The tax deduction is not worth
carrying the mortgage into retirement.”
THE GOAL LINE
Every football field has an ultimate
measure of success: crossing the goal
line. Most of us move ahead by making
incremental yardage downfield. Some of
us have stalled and need a little guidance
and encouragement from the sideline
coaches. And then there are those who
can see the end zone. When you’re
getting close, yes, make that sprint for the
goal line – that’s the best advice from
those in the know. And when you score,
you’ll know you’ve won. »
Before you start shopping, find
out how much house you can
afford. Go to usaa.com and
search Mortgage Calculators.
USAA or its affiliates do not provide tax advice.
Taxpayers should seek advice based upon their
own particular circumstances from an independent tax advisor.
Certified Financial Planner Board of Standards
Inc. owns the certification marks CFP® and
Certified Financial PlannerTM in the United States,
which it awards to individuals who successfully
complete CFP Board's initial and ongoing
certification requirements.
800-531-USAA (8722)
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from having access to some of the
information we have collected.
This information includes your
income, your transactions with
other companies and your credit
information.
If you choose to opt out, you
may update your profi le at
usaa.com/optout or call 800531-7154. Your choice will apply to
your joint account holders on the
effective date of your opt out.
To contact us about privacy,
write to:
USAA Privacy Offi ce
9800 Fredericksburg Rd.
San Antonio, TX 78288-0020
This statement is made on behalf of
USAA, which includes United Services
Automobile Association, affiliated
companies identified with the USAA
name and logo and Garrison Property
and Casualty Insurance Company. USAA
includes financial and non-financial service
companies that offer auto, property and
life insurance, banking, financial planning,
investments, merchandise and travel
services and a non-profit organization.
summer 2010 usaa magazine 25
USAA Online
usaa
on the go
This icon indicates you can find
more information at usaa.com.
doing the right thing
Read USAA’s 2009 Report To Members online or on the run.
USAA® Money Manager
Imagine a complete view of your finances in one place.
Coming soon, you’ll be able to view all of your account balances and
transactions by aggregating with a trusted source. The USAA Money
Manager, available soon, lets you categorize your spending and identify
areas where you need to trim — and helps you maintain and monitor
a budget. Our competitive advantage: Because USAA integrates
information from your Personal Financial Management tool into your
Account Summary pages, USAA Money Manager is easy to use.
Member Stories
You can connect, share and learn
from other USAA members with
Member Stories on usaa.com.
We’d love to hear your stories and
see your photos and videos about
what USAA means to you. If we
helped you or your family in a time
of need, let us know. Visit usaa.com
and search Member Stories.
Talk to Us
Here to Help
Hurricane season is
upon us. Prepare
for this and other
natural disasters at
usaa.com/Help.
There are more ways than ever to tell us what’s on your mind.
Twitter
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Log on to
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Please include a daytime
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26 usaa magazine Summer 2010
800-531-USAA (8722)
Photography by amana productions inc./Getty Images; Abby Bennethum; Jose Luis Pelaez/Getty Images; FrareDavis Photography/Getty images
Even in difficult economic times, USAA is committed to doing
the right thing — whether that means returning money to
members or developing military-friendly products and services.
To learn more about why 2009 was USAA’s best year ever, go
to USAAReportToMembers.com from your computer or iPad, or
view the report on your mobile phone.
Exclusive Products and Services for USAA Members Only
USAA Magazine | Summer 2010
insurance
Banking
investments
Financial Planning
shopping & discounts
Solutions to
Meet Your Needs
USAA offers a full range of
competitive products.
Not just great insurance. In addition to highly competitive, top-rated property and casualty insurance,
as a full financial services provider, we also provide
a wide range of banking, investment, retirement
and advice services when and where you want. With
award-winning service, a comprehensive website and
mobile apps that make life easier, we’re here to help
you make tough financial decisions and provide
solutions, no matter how big or small your needs.
Photography by andy anderson
Tell us what you think about USAA
products and services: Visit usaa.com
and write a review or rate our products.
Investments/Insurance: Not FDIC Insured ∙ Not Bank
Issued, Guaranteed or Underwritten ∙ May Lose Value
usaa.com
SUMMER 2010 usaa magazine 27
Member
Savings
Knowing
more
begins
now.
Shopping & Discounts
Shopping & Discounts
Travel
Savings
The ‘Unexpected’
Never Takes a Vacation
Members receive exceptional
savings on cruises, resorts,
hotels, tours and rental cars.
Protect yourself
through Travel Insured
International vv and receive
program benefits.
Go easy this summer.
Great vacation deals are
at your fingertips.
» Vacation Points
Earn Vacation Points from Explore
Cruise & Travel on your next travel
purchase and use them for future vacation savings. Get 5,000 points just for
getting started at usaa.com/Travel.
Save up to $600 on your next cruise
with 10,000 Vacation Points.v
Book a hotel for as little as $40 a
night, and earn double points when
you book online.
Visit usaa.com/Travel for even more
deals on tours and resorts.
» Car Rentals
Save up to 25% off the public rate
with Avis and Hertz and up to 20%
with Budget.
There are no additional-driver fees for
spouses or USAA family members.
Skip the lines! Get free enrollment in
priority programs.
•
Whether you’re getting ready for a routine business
trip or a once-in-a-lifetime vacation, don’t let
unexpected events ruin your travel plans.
» USAA members also receive:
a full refund for trip cancellations
due to deployment, or revocation
and deployment.
24/7 phone assistance.
travel coverage for kids included
with select plans.vvv
Vacation Points with the purchase of
a policy — points can be redeemed for
future savings on cruises and resorts.v
•
•
» Member-only benefits include:
exclusive pricing.
flexible options that let you customize
your plan to fit your travel needs.
plans to fit any budget.
•
•
•
•
•
•
•
•
•
•
Visit usaa.com/RentalCar.
28 usaa magazine SUMMer 2010
Plan is designed by Travel Insured International. Insurance is underwritten by Arch Insurance Company,
licensed in all states and the District of Columbia, and headquartered in New York. This is a brief
coverage description. See Policy for restrictions. Conflicts between this document and the Policy will be
governed by the Policy. Not all coverage available in all states. Optional Coverage only applies when
requested and the appropriate additional cost has been paid.
vv
vvv
All children under 18 receive free protection. Children must be traveling with and be related to the
primary adult enrolled in the protection plan. Optional Coverage only applies when requested on the
application and the appropriate additional plan cost has been paid. Children under 18 receive the Cancel
for Any Reason and Cancel for Work Reason coverage free when traveling with and related to the
primary adult who purchases the optional coverage. The purchase of Accidental Death & Dismemberment Common Carrier (Air Only), Medical Upgrade, and Sports Coverage must apply to all travelers,
including kids traveling free with related paying adult. $0 Trip Cost means there is no coverage for Trip
Cancellation; Trip Interruption up to $1,000 return air only.
USAA Alliance Services L.L.C. is not a participant in the California Travel Consumer Restitution Fund, and
this transaction is not covered by it. Passengers are not eligible to file a claim against that fund in the
event of USAA Alliance Services L.L.C. default. USAA Alliance Services L.L.C. complies with California’s
Seller of Travel requirements and has posted a $100,000 surety bond. CST:201538-50.
800-531-USAA (8722)
Photography by Andy Anderson
•
Vacation Points are administered and managed by the International Cruise & Excursion Gallery Inc.
(ICE), a Delaware corporation doing business as Explore Cruise & Travel, and are subject to the Vacation
Points terms and conditions available at usaa.com/Travel or by calling 800-531-8354.
v
Investments
Spending Instead of Saving?
USAA has comprehensive solutions for your
financial needs — long or short term.
We’re equipped to advise you based on your entire financial picture,
not just a piece of it.
» Free Advice: Our advisors are salaried and don’t work on commission. You’ll
receive free advice guided by your financial goals, not ours.
» Comprehensive Products: USAA has a suite of products that includes
banking and investment solutions. A few options include the following:
Mutual Funds: USAA offers a huge selection of mutual funds, making it easy to
design a portfolio to help meet your unique needs.
Certificates of Deposit: USAA Bank provides options — our CDs vary in rate
type and term. Choose from fixed to variable rate and from long to short term; find a
CD that fits your unique needs.
College Savings: Starting at just $250, choose from six investment portfolios, an
age-based option or a preservation of capital option.
IRAs: USAA provides competitive options for individuals or businesses, whatever
your needs.
Annuities: Compare our guaranteed savings annuities, and you’ll find our interest
rates are among the best in the industry. The fixed annuity guarantee against principal
loss depends on the claims-paying ability of the insurance company.
•
•
Photography by Ariel Skelley/Getty Images; Heather Perry/Getty Images
•
•
•
Consider the investment objectives, risks, charges and expenses of the USAA mutual funds
and/or USAA College Savings Plan (Plan) carefully before investing. Contact us at 800-5318910 to request a prospectus and/or Plan Description and Participation Agreement containing
this and other information about the funds and/or the Plan from USAA Investment Management Company. Read it carefully before investing. For the USAA College Savings Plan, if you
or the beneficiary are not residents of the State of Nevada, consider before investing whether
your or the beneficiary’s home state offers a 529 plan that provides its taxpayers with state
tax and other benefits not available through this Plan. Please consult your tax advisor.
Investments/Insurance: Not FDIC Insured • Not Bank Issued, Guaranteed or Underwritten • May Lose Value
Investment and insurance products are not deposits, not insured by FDIC or any government agency, not
guaranteed by the Bank. Investments and certain insurance products may lose value.
CDs are provided by USAA Federal Savings Bank, Member FDIC.
There are costs associated with annuities, including surrender fees, early withdrawal penalties and mortality
risk expenses.
Annuities do not provide any tax-deferral advantage over other types of investments within a qualified plan.
usaa.com
USAA Member Services
insurance
» Auto Insurance
» Home and Property Insurance
» Life Insurance
» Annuities
» Medicare Solutions
» Long-Term Care Insurance
» Major Medical Insurance
» Insurance for Other Needs
banking
» Checking
» Savings
» Certificates of Deposit (CDs)
» Credit Cards
» MoversAdvantage®
» Mortgage
» Home Equity Products
» Car Buying Service
» Auto Loans
investments
» Mutual Funds
» Brokerage Services
» College Savings Options
» Personal Asset Management
» IRAs
» Market News & Research
Financial planning
» Personal Financial Plans
» Wealth Management
shopping & discounts
» Diamonds & Jewelry
» Cruise & Travel Services
» Rental Cars
» Flowers
» USAA MemberShop™
» Home Security
(800) 531-USAA (8722)
SUMMer 2010 usaa magazine 29
Legal disclosures
Investments/Insurance: Not FDIC Insured • Not Bank Issued, Guaranteed or
Underwritten • May Lose Value
The preceding articles should not be considered tax, legal or estate planning advice. Consult your tax,
legal or estate planning professional regarding your specific situation.
Page 8
The USAA
Educational
Foundation
The USAA Educational Foundation,
a nonprofit organization, has the
resources to help make your life
more manageable.
Balancing Family
and Career
(#529)
Children With
Special Needs
(#548)
Financial Planning
and Goal Setting
(#511)
Managing Credit and Debt (#501)
Stocks and Bonds
(#553)
Buying a Vehicle
That Meets Your Needs
(#505)
Child Safety in and
Around Vehicles
(#555)
Buying or Refinancing
a Home
(#502)
To order free publications, just
call 800-531-6196 or visit
usaaedfoundation.org. Have your
USAA number and publication
number ready when you call.
The USAA Educational Foundation does not endorse
or promote any commercial products or services.
30 usaa magazine sUmmer 2010
USAA Relocation Services Inc., a
licensed real estate broker and
USAA Brokerage Services is a
division of USAA Financial Advisors subsidiary of USAA Federal Savings
Bank. Not available for employerInc., a registered broker dealer.
sponsored relocations, or for
transactions in Iowa or outside
Page 10
1
U.S. This is not a solicitation if you
USAA Car Buying Service and
are already represented by a real
Low Price Guarantee provided by
estate broker. Cash bonus limited
Zag.com Inc.
2
Applies to new vehicles purchased in some states. Bonus ranges from
directly from your Low Price Certi- $350 to $1,550 based on sale price
of home sold/purchased. You must
fied Dealer or any USAA Certified
enroll in program before contacting
Dealer on the USAA Car Buying
Service that matches the Low Price participating real estate firm and
be represented by that firm at closCertified Dealer price. Visit usaa.
com for complete guarantee terms ing to qualify for bonus. Subject
to credit and property approval.
and conditions.
3
GM offers are limited time purchase Availability restrictions apply.
price discounts. Offers available
Page 18
through participating dealers. GM
CRPC® and Chartered Retirement
discounts not available on Saturn,
Hummer, Pontiac and Saab vehicles, Planning CounselorSM are service
marks of the College for Financial
Corvette ZR1, Cadillac CTS-V and
Planning®. The CRPC® designation
medium duty trucks. GM discounts
only to persons eligible for member- indicates satisfaction of course reship in USAA Property and Casualty quirements set forth by the College.
Insurance Group. P&C membership
is generally available to current and Member
former members of the U.S. military The term “member” does not conand their former dependents. There vey legal, ownership or eligibility
rights. Ownership rights are limited
is no obligation to purchase or
continue USAA products or services to eligible policyholders of United
Services Automobile Association.
to obtain the offers. GM requires
presentation of proof of USAA
Eligibility
eligibility and will accept a USAA
card with USAA number, USAA loan Membership eligibility restrictions
apply to purchase of property and
documents, or a USAA insurance
card at the time of purchase. Some casualty insurance. Eligibility may
change based on factors such as
manufacturer incentives cannot
be added to the discount. See your marital status, rank or military status. Rates and benefits may vary
dealer for more details.
4
due to eligibility. Contact us to
Auto insurance is only available
update your records. Children of
to persons eligible for USAA P&C
USAA members are eligible to purGroup membership. P&C Group
membership is generally available chase auto or property insurance if
to current and former members of their eligible parent purchases
USAA auto and property insurance.
the U.S. military and their former
Purchase of a non-property and
dependents. USAA means United
casualty insurance product, or an
Services Automobile Association
insurance policy offered through
and its affiliates. Property and
USAA General Agency, does not
casualty insurance provided by
establish eligibility for or memberUnited Services Automobile Association and its affiliate property ship in USAA property and casualty
and casualty insurance companies. insurance companies.
Each company has sole financial
responsibility for its own products. USAA Companies
5
USAA means United Services AutoBank products, including auto
mobile Association and its affiliates.
loans, provided by USAA Federal
Savings Bank, Member FDIC.
6
Obtaining insurance from USAA Property and casualty insurance
provided by United Services Autois optional, not required to
mobile Association, USAA Casualty
receive credit; insurance can be
Insurance Company, USAA General
acquired from other sources.
Indemnity Company, Garrison Property and Casualty Insurance ComPage 13
7
pany, USAA County Mutual
MoversAdvantage® offered by
Insurance Company, USAA Texas
Lloyds Company, San Antonio, TX,
and USAA Ltd. (Europe).
Investments provided by USAA
Investment Management Company
and USAA Financial Advisors Inc.,
both registered broker dealers. USAA
Brokerage Services is a division of
USAA Financial Advisors Inc., a registered broker dealer. Financial planning services and financial advice
provided by USAA Financial Planning
Services Insurance Agency Inc.
(known as USAA Financial Insurance
Agency in California), a registered
investment adviser and insurance
agency and its wholly owned subsidiary, USAA Financial Advisors Inc., a
registered broker dealer.
Trust Services offered by USAA
Federal Savings Bank. Credit cards
provided by USAA Savings Bank,
other bank products provided by
USAA Federal Savings Bank, both
Member FDIC.
Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX, and in New
York by USAA Life Insurance Company of New York, Highland Falls, NY.
Each company has sole financial
responsibility for its own products.
Other Product-Related
Disclosures
Property and Casualty
Insurance
Product or service requirements,
price and features can depend on
the member’s choices as well as
laws and the product or service contracts, which may vary by location.
We encourage you to read your
USAA policies and contracts carefully. Underwriting restrictions apply.
Investments
Certified Financial Planner Board of
Standards Inc. owns the certification
marks CFP® and Certified Financial
Planner™ in the U.S., which it awards
to individuals who successfully complete CFP Board’s initial and ongoing
certification requirements.
All non-USAA products, brand
names and company names
are trademarks or registered
trademarks of their
respective owners.
© 2010 USAA.
800-531-USAA (8722)
INSURANCE | BANKING | INVESTMENTS | RETIREMENT | ADVICE
GO EASY THIS SUMMER.
Use member discounts and rewards.
Getting to the destination you want — at a price you can
feel good about — is fast and easy at usaa.com/travel.
Log on and take advantage of:
› Exclusive values on hotels, resorts, cruises and tours
› Vacation Points that you can redeem for additional
savings on future travel
› Bookmark our website and check back often for new
offers from Explore Cruise & Travel
250
UP $
TO
FREE SHIPBOARD
CREDIT
on select 2010 fall sailings
to the Mediterranean.
7-night Mediterranean
roundtrip from
Barcelona on Celebrity
Constellation, starting
at $599* per person
Start your travel here, every time.
800-571-5198 | usaa.com/travel
*All offers are applicable only to new bookings made by calling 800-571-5198. Cruise rates are U.S. dollars, cruise only, non-air, per person based on double occupancy, capacity controlled, subject to availability
and can change at any time without notice. Government fees and taxes are per person, additional and subject to change. Onboard credit is applied per cabin based on double occupancy. Complimentary
onboard credit offer: $100 per booking for veranda staterooms; $200 per booking for concierge staterooms; $250 per booking for suites. Onboard credits are per stateroom for the first and second guest
and are shown in U.S. dollars. Offer good for a limited time only and only available on select Celebrity sailings. Not combinable with any other shipboard credit discount or any other offer. Other restrictions
may apply. Ship’s Registry: The Bahamas and Malta. Vacation Points are administered and managed by the International Cruise & Excursion Gallery, Inc. (ICE), a Delaware corporation doing business as
Explore Cruise & Travel, and are subject to the Vacation Points terms and conditions available at usaa.com/travel or by calling 800-571-5198. USAA Alliance Services, LLC is not a participant in the California
Travel Consumer Restitution Fund, and this transaction is not covered by it. You are not eligible to file a claim against that Fund in the event of USAA Alliance Services, LLC’s default. USAA Alliance Services,
LLC complies with California’s Seller of Travel requirements and has posted a $100,000 surety bond. CST: 2015382-50. Use of the term “member” or “membership” does not convey any legal, eligibility or
ownership rights. Purchase of an alliance services product does not establish eligibility for or membership in USAA property and casualty insurance companies. © 2010 USAA. 109201-0610
USAA Magazine
9800 Fredericksburg Road
San Antonio, Texas 78288
«
MEMBER SNAPSHOT
PRSRT STD
U.S. POSTAGE
PAID
USAA MAGAZINE
»
Building Community
Designer John Littlefield USAA member since 1993
Every Sunday night, 12 million Americans grab their handkerchiefs and
guard their heartstrings for a new episode of ABC’s Extreme Makeover
Home Edition. On the popular show — regarded by the Parents
Television Council as one of the most family-friendly series on network
television — host Ty Pennington works with a team of designers to grant
deserving families the home makeover of their dreams.
Recently, Extreme Makeover designer John Littlefield was given
an assignment that pulled a few heartstrings of his own. It was a
makeover for the Hattiesburg, Miss., home of Sherman and Gina
Heathcock. Sherman, a staff sergeant in the Army National Guard,
was in Iraq for his first tour when Hurricane Katrina sent three
large trees crashing into his family’s home.
Over time, the damage caused rotting ceilings and an unsound
foundation, making the home unsafe for the couple and their three
children: Annie, 12, Gary, 10, and Tessa, 6. So while Sherman was
away on his second tour in Iraq, Littlefield and the team at Extreme
Makeover swooped in to transform the Heathcocks’ home into
Hattiesburg’s first certified green home. USAA participated in
the show by providing $75,000 and paying off the Heathcocks’
previous mortgage.
For Littlefield, it was a privilege to help a family who has
sacrificed so much. “We can’t ever forget the strength and courage
of those who have sacrificed for their country,” he says. “If you
see them on the street, thank them for their service. They’re the
reason we get to do all of this, and we can never forget that.”
Photography by Dave Lauridsen
Watch exclusive behind-the-scenes clips of John Littlefield during the filming of the
Heathcock family’s extreme home makeover. Go to usaa.com and search Littlefield.
109150-0510