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Connections eNewsletter
Hugo's Vlog - Episode 1
A Day in the Life of Hugo.
Hugo calls 1st Nor Cal customer support.
PresidentsCornerPresident's Corner
My younger nephews, ages 11 and 10, are prime consumers. It did not used to be that way. In the olden days of the late 1960s when I was that age, the actual consumer parents analyzed the cost of kids' toys and clothes and purchased items based on that analysis, which consisted of driving to the mall or department store and comparing prices.
Today, the kids perform that analysis themselves with the click of a mouse. The main difference is that kids are completely price inelastic. That means that no matter how much the price of an item changes, kids will still want it; in economic terms, demand remains constant.
This sea change is important because of the challenges facing the Federal Open Market Committee (FOMC). This austere group is comprised of members of the Board of Governors of the Federal Reserve System and a rotating group of the eleven Reserve Bank presidents who serve one-year terms. The FOMC reviews economic and financial conditions, determines monetary policy, and assesses the risks of price stability and sustainable economic growth.
The FOMC is currently debating how fast to increase interest rates (In reality, the committee only determines the federal funds, or overnight rate, while the longer-term rates are determined by the marketplace.) The committee's current stance is to increase the overnight rate when the inflation rate exceeds 2%. Through October, the average inflation rate this year checks in at 2.1%.
Sounds good, right? Here's the dilemma. In the ten years following the Great Recession, the average inflation rate is 1.7%. During that same period, the Gross Domestic Product (GDP), which calculates our economy's growth by measuring the value of all goods and services produced, only grew 1.4%. Typically, GDP grows at approximately 4% per year. Today's ratios would be considered anemic by historical standards.
The media breaks up the various pieces of the economy into small discrete bites and ignores the relationship between inflation, GDP, the money supply, demand, production, and supply. One of the biggest political issues being debated in the blogosphere (that's for people who spend their entire day on the Internet) is wage disparity. What is not discussed is the interrelationship between wages, GDP, and inflation. It has been proven over time that an increase in wages results in more consumer spending, which in turn increases production that increases inflation and hence interest rates. Tax policy, which is currently but which always seems to be a hot topic, may affect on whether employers will increase salaries but does not alter spending behavior at the individual taxpayer level.
This year marks the tenth anniversary of the passing of my beginning economics professor during my freshman year in college. He was an economist as well as the dean of the Graduate School of Education and was the founding president of an economic think tank. He was very influential in my thinking about the relationships between the many economic pieces. The professor also taught me a lesson on high finance for college students. In those days, students were able to sell their used books back to the student bookstore at the end of the term. Unfortunately, he elected not to teach the class again, and I was stuck with an expensive used Economics textbook. I do not recall Milton Friedman, John Maynard Keynes, or even Adam Smith addressing the economics of college textbook buybacks. Oh well, live and learn.

David M. Green
(925) 335-3802

This graph represents the total public debt (in trillions of dollars) from 1966 through the first quarter of 2017. From 1980 to 1992 when tax rates were cut, the debt to Gross Domestic Product (GDP) ratio grew from 32% to 63%. Today, that ratio is 106%. The growth in the economy has actually slowed since these tax cuts were enacted.

memoriamIn Memoriam
Long-time Board Member Frank Fernandez passed away on November 26, 2017. Frank served on the Board of Directors from 1988 through 2008, including one term as Chairman. Frank served on the Credit Union's Supervisory Committee and Nominating Committee prior to his election to the Board.
Frank worked for Contra Costa County, primarily in the County Administrator's office from 1952 to 1984. In 1976, he was appointed Assistant County Administrator (Finance). His duties included coordinating the County and County Special District budget preparation during a time of difficult financial circumstances after the voters passed Proposition 13 in 1978. Frank won the respect of his many associates for the quality of his work, his objectivity, and his good nature.
Before his career with the county, Frank attended high school in Pittsburg, served in the U.S. Army in Europe during World War II, and subsequently received a degree in accounting from Armstrong College in Berkeley.
Frank recognized the challenges of operating a credit union in a volatile economy while at the same time ensured through his leadership the Credit Union made certain of the complete safety of deposits, maximized interest earnings on savings while providing loans at the lowest possible interest rates and continued a high level of services for members.

Pictured: Frank Fernandez, sitting among fellow Board Members in 1992.

firstalerts1st Alerts
  • We're upgrading @ccessOnline Home Banking! Learn more:
  • Please be informed that loan life insurance expired as of October 31, 2017. No claims will be processed after that date.
  • Click here for information regarding the Equifax Breach.
  • If you have @ccessOnline Home Banking with us, simply transfer a payment to your Visa card. Setting up a regular payment using Bill Pay in @ccessOnline Home Banking will generate a check and that will delay your payment. Instead, you can set up a single or recurring transfer. A transfer is immediate.

*Annual Percentage Rates (APR) are subject to change. Rate, maximum term, maximum loan amount and advance amount are based on credit qualifications. Maximum terms vary based on loan amount. We reserve the right to determine collateral value based on industry recognized guidelines or full appraisal. Must be 18 years old or older to apply for a loan. Loans are subject to all Credit Union policies and procedures. Auto loan at 2.49% APR requires a minimum FICO® 750 Credit Score. 72 months term at 2.49% APR is $14.97 per $1,000.00 borrowed.
community1st in the Community
Last month, we attended the Contra Costa Superior Courts Benefits Fairs in Martinez, Walnut Creek, Pittsburg and Richmond. We had a great time talking to some of our current members and sharing the benefits of membership with the community!
Pictured: Kris Stas-Brown, Assistant Branch Manager, at the Martinez Fair
tipsforteensTips for Teens
Happy New Year! 
I've always thought of the New Year as a gift. It's a chance to start over, to improve, and to begin again. As great as a New Year's Resolution sounds, it's all too easy to overshoot your goals and give up quickly. This year, try to aim for realistic goals. Small changes can add up to make a big difference. For example, if your goal is to eat healthier, start with simply meeting your daily water intake. 
Here are a few more suggestions for simple New Year's Resolutions that can make a difference:
  • Switch your disposable water bottle for a reusable one
  • Bring reusable shopping bags with you to the store instead of buying bags
  • Turn off your car while waiting in the drive-thru to reduce idling
  • Turn lights off when you leave a room
  • Clean up the trash left behind on a park bench or park table, even if it's not yours
Notice something? These are all free ways of improving yourself or the space around you.
Whatever you decide on, may this year be ever in your favor.
Luis Dominguez
Student Social Media Intern
1st Nor Cal Credit Union

insuranceInsurance Tips 
Stay Safe During the Holidays  
The holidays are meant to be a time for fun and celebration with family and friends. However, the hectic pace of the holidays can also present increased risks, such as overcrowded stores and greater opportunities for thieves to target your valuables and personal information.
Here are five simple tips to help you have a safe and enjoyable holiday season:
  1. Watch Out for Porch Pirates
    Theft of packages from front porches and stoops increase as online shopping drives more home deliveries during the holidays. Take advantage of electronic delivery alerts and other protections to make sure your gifts are safely delivered - and received.

  2. Beware of Parking Lot Pilfering
    While you're in the mall purchasing gifts for your friends and family, thieves may be roaming through the parking lot looking to steal valuable items in unlocked cars. Shoppers should remember to always lock their doors, park in well-lit areas and hide valuables from plain view.

  3. Protect Your Identity, Both Online and in Stores
    Before you go shopping, think about how much information a thief would get his hands on if your wallet or purse was stolen. Avoid carrying Social Security cards, birth certificates or passports unless absolutely necessary. When shopping online, be sure to only use a secure website, log off from that site after you have completed your purchase, and monitor your bank accounts and credit card activity regularly throughout the holidays.

  4. Travel Safely
    The holiday season brings a number of unique driving risks. During this time of year, we have difficult weather conditions, limited daylight and drivers in unfamiliar areas. By planning extra travel time and eliminating distractions, you can help ensure safe travels during the holidays.

  5. Prevent a Home Fire - Use Candles Wisely
    Christmas Day, Christmas Eve and December 23 are three of the top five days for home fires caused by candles. Never leave a burning candle unattended, and do not put any candles or open flames near Christmas trees or other holiday decorations that could quickly spark a fire in your home
As an added benefit of your 1st Nor Cal membership, we at Lou Aggetta Insurance will help you review the things that are important to you and provide you with options for reducing risk in your life. We are an independent insurance agent and can provide you with home, auto, umbrella, earthquake, flood, business and many other types of insurance coverage.

Contact us today to schedule your free review.

Denia Aggetta Shields
Lou Aggetta Insurance, Inc.
2637 Pleasant Hill Road
Pleasant Hill, CA 94523
(925) 945-6161
License #OK22281

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retirementsolutionsRetirement Solutions 
Retirement Plan Contribution Limits for 2018  
By Jason Vitucci, CFP® & Gene A. Schnabel

In case you may not be aware, we would like to share with you some updates made this October by the Internal Revenue Service (IRS) and Social Security Administration regarding cost-of-living adjustments. 
The IRS published cost-of-living adjustments that apply to dollar limits for retirement plans for the tax year beginning on January 1, 2018.
2018 Retirement Plan Contribution Limits 
401(k)s. The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan, is $18,500 for 2018-a $500 boost over 2017.
The 401(k) Catch-Up . The catch-up contribution limit for employees age 50 or older in these plans stays the same at $6,000 for 2018. Even if you don't turn 50 until Dec. 31, 2018, you can make the additional $6,000 catch-up contribution for the year.
SEP IRAs and Solo 401(k)s . For the self-employed and small business owners, the amount they can save in a SEP IRA or a solo 401(k) goes up from $54,000 in 2017 to $55,000 in 2018. That's based on the amount they can contribute as an employer, as a percentage of their salary; the compensation limit used in the savings calculation also goes up from $270,000 in 2017 to $275,000 in 2018.
After-tax 401(k) contributions . If your employer allows after-tax contributions to your 401(k), you also get the advantage of the $55,000 limit for 2018. It's an overall cap, including your $18,500 (pre-tax or Roth) salary deferrals plus any employer contributions (but not catch-up contributions). 
The SIMPLE. The limit on SIMPLE retirement accounts for 2018 is $12,500, the same as in 2017. The SIMPLE catch-up limit is still $3,000. Here's how a SIMPLE works in practice, and here's how the 2015 year-end tax deal authorized rollovers into SIMPLEs.
Defined Benefit Plans. The limitation on the annual benefit of a defined benefit plan goes up from $215,000 in 2017 to $220,000 in 2018. 
IRAs. The $5,500 limit on annual contributions to an Individual Retirement Account remains the same for 2018, the sixth year in a row. The catch-up contribution limit, which is not subject to inflation adjustments, remains at $1,000. (Remember that 2017 IRA contributions can be made until April 17th, 2018.)
ROTH IRAs. The contribution limit for 2018 is $5,500, or $6,500 if you're age 50 or older. Your Roth IRA contributions may also be limited based on your filing status and income.
Roth IRA phase-Outs. The inflation adjustment helps Roth IRA savers too. In 2018, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $189,000 to $199,000 for married couples filing jointly, up from $186,000 to $196,000 in 2016. For singles and heads of household, the income phase-out range is $120,000 to $135,000, up from $118,000 to $133,000 in 2017. 
FSAs. The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) is $2,650 in 2018.
Another recent announcement was made by the Social Security Administration, regarding a 2% cost of living adjustment to benefits, which is a substantial increase than in 2017 (0.3% for 2017) and largest since 2012. 
This adjustment will increase benefits by $27 on average. 
On the other hand, the Taxable Wage Base increased from $127,200 to $128,700, a little over 1%. This results in a $93 Social Security tax increase year-over-year for those with earned income at or above the limit; the new maximum is now $17,040, up from $16,920 in 2017. 
Among other notable increases is the amount individuals under full retirement age may earn before experiencing a decrease in their Social Security payments. The 2018 limit increased from $16,920 to $17,040; after that, $1 of benefits is deducted for every $2 earned above $17,040.
If you have questions or need assistance with year-end financial and tax planning or charitable giving strategies, don't hesitate to contact our office. As a valued 1st Nor Cal member, we invite you to contact us for a complimentary financial analysis. We also invite you to attend any of our Retirement Planning workshops that we hold. For more information about our practice, or to make an appointment, please call us at (925) 370-3750 or visit our website at

Vitucci Integrated Planning  
2890 N. Main Street, Suite 201
Walnut Creek, CA 94597 
Securities through First Allied Securities, a registered broker dealer, member FINRA/SIPC. Advisory services offered through First Allied Advisory Services, Inc. Registered Investment Advisor. Investments not FDIC or NCUA/NCUSIF insured, not insured by Credit Union, may lose value. Products offered are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. 1st Nor Cal CU, Bay Area Retirement Solutions and First Allied are all separate entities. Jason Vitucci CA Insurance Lic.: 0F59894, Gene A. Schnabel CA Insurance Lic.: 0663016 
FinancialCounselingFREE Financial Counseling
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1st Nor Cal is here to help. Timely and honest debt advice is available to our members at no cost or obligation. Learn how to manage your finances.

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Just a reminder, you can annually request FREE Credit Reports from all 3 credit reporting agencies online by going to:
For FREE Financial Counseling, don't hesitate to contact:

Shelley Murphy
Senior Vice President of Lending & Collections
(925) 228-7550 Ext.824

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