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Certificates Offer Security for Truliant Member Lonnie King

Contributed by: Heath Combs

Lonnie King doesn’t have any trouble sleeping. He doesn’t have nightmares about a major correction in the stock market; he’s not concerned about the bond market and whether rates are going up or down; and he certainly doesn’t care whether hedge-fund managers are making or losing billions of dollars.
For King, pictured, 67, who uses Truliant's Wytheville, Va. location, safety and peace of mind are what he cares about. “I use Truliant certificates for the security. There is not the risk of loss – and Truliant doesn’t charge fees,” said King, who has been banking with Truliant for over 20 years. “I’m trying to walk a delicate line between safety and making a little bit of money. 
“I’ve always loved that term ‘diversified’ when it comes to investments. It’s like playing at a roulette table. You pick a lot of red and a lot of black in hoping to diversify your investments. To me, that’s not wise gambling.”
Before retiring, King worked in data processing at the Twin County Regional Healthcare in Galax, Va. Late in his career, he and his wife were thinking about putting some of their earnings with a large money-management firm.
“I was talking with one of their representatives,” he said. “He probably shouldn’t have told me this, but he said they could manage my money and only charge me $3,700 a year. He said others would probably charge more. Then he asked me who’s going to manage my money? 
“‘I am,’ I told him.”
“I find it really awkward to pay other people to manage my money,” King continued  “They don’t have any skin in my game. I have to pay them whether I lose money or make money. I find that awkward.
“And, as you know, the stock market is unpredictable. I’m 67. I don’t have time to wait for the market to recover from a major decline. Things that are going on in other parts of the world can influence stock prices. I just don’t want my money to be affected by world events that I can’t control.
“I’m not greedy. I have saved sufficiently. I wish my wife had lived longer, but an illness caught up to her 10 months ago. But we invested well, wisely and we lived frugally. We have helped our son and church. I don’t feel like we’ve accumulated great wealth, but I think we have done well and better than a lot of people,” King said.
King, who lives in Hillsville, Va., banks at Truliant’s Wytheville office. He has worked with Truliant’s Terri Amburn for a number of years. 
“I’ve worked with Lonnie King for about 15 years,” said Amburn, manager of the Wytheville location. “He’s always been one who will check with us on certificate rates. I encourage him to shop the market, but he always comes back to Truliant. He’s a pleasure to work with and an extremely loyal member.”
While certificates of deposit are safe, they do take some thought. One of the key issues with certificates is the maturity date. Strategically, you don’t want all your certificates to mature at the same time. If you need money and access a certificate early, you’ll pay a penalty. Bankrate reported the following penalties for popular maturities:
3-month certificate: three months’ interest
6-month certificate: three months’ interest
1-year certificate: six months’ interest
2-year certificate: six months’ interest
5-year certificate: 12 months’ interest
“That was a problem for me at first,” King said. “I guess I got greedy and looked at 1.5% or 2% certificates for the greater number of years. Unfortunately, I didn’t have them come due at various times, so I boxed myself in a little bit.”
Recently, King had a certificate come due in his IRA. He worked with Amburn to develop a ladder strategy for his new certificates. Laddering certificates means buying several maturity lengths with varying rates: one year, three years and five years. It’s important to note that shorter term certifificates  will have lower interest rates, but laddering significantly increases flexibility when someone needs access to their money.
King’s longest certificate matures in 2020. He’s glad he worked out the laddering strategy with Amburn, especially as he looks ahead to Required Minimum Distributions (RMD) that are required by the IRS when an individual turns 70.5. Each year, individuals must take out a minimum fixed percentage of their IRA and 401(k) assets. Why? This money has been building tax-free and the IRS wants to ensure that it receives its money. The percentage required increases each year.
In King’s case, the laddering of his certificates guarantees that the money will be available to meet the RMD requirements without incurring penalties for breaking a certificate early. 
“I tremendously appreciate what Truliant does. It’s Truliant’s basic philosophy to serve its member-owners – and I think they do a very good job in doing that. 
“That’s why I like credit unions, and that’s why I have my certificates with Truliant."

Visit our certificate rates page for more information on how much you can earn, or open your next certificate online. 

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