Fall 2009 USAA Magazine

U SA A .CO M
FA L L 2 009
M AGA Z I N E
A MEMBER’S GUIDE TO FINANCIAL SECURITY
A
NEW
HORIZON
THE FINANCIAL WATERS
OF THE PAST YEAR WERE
ROUGH. WHAT’S NEXT?
FdUSFA09_01_Cover.indd 1
8/14/09 7:27:14 AM
10.0 in.
7.5 in.
SAVE UP TO $600
ON CHECKING
OR KEEP WATCHING
YOUR BANK FIND
WAYS TO TAKE IT.
TRY USAA BANK.
Better banking begins now | 800-661-8722 | usaabanking.com
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USAA Bank means every ATM is free nationwide,1 along with free USAA Web BillPay® and mobile banking.
We’ll show you how to save up to $6002 on your account.
Purchase of a bank product does not establish eligibility for or membership in USAA property and casualty insurance companies. Availability restrictions apply. 1USAA does not charge a fee for the
first 10 ATM withdrawals and refunds up to $15 in other banks’ ATM usage fees each month. 2Figure based on potential savings with USAA checking compared to average fee information on 2008
bankrate.com checking study. USAA Federal Savings Bank, Member FDIC. © 2009 USAA. 92211-0509
FdUSFA09_02_C2 ad.indd 1
8/14/09 3:03:25 PM
MESSAGE FROM THE CEO
CHILDHOOD
LESSON REWIND
IF YOU KNOW THE PHRASE, “A penny saved
is a penny earned,” almost as well as you know
your own name, chances are you’re like me and you’ve
been influenced by
someone who survived
the Great Depression.
CONCERNED
ABOUT YOUR
FINANCES?
S t r a n g e h ow t h i s
recession has brought
back our parents’ lessons
on managing money.
That’s probably a good
USAA’s licensed financial
thing in that we’ve been
advisors are not paid by
forced to put our financial
commission and provide expert
houses in order. Now let’s
advice — at no cost or obligation
try to keep it that way.
to you. Call (800) 272-3914.
As a USAA member,
you have help. USAA.COM
has a free online financial
assessment, debt calculator and more. For a very
competitive fee, you can also get a comprehensive
financial plan or retirement plan from one of our CERTIFIED
FINANCIAL PLANNERTM practitioners. They can help you get
your bearings, set priorities and get motivated to take
control. They do not receive commissions — so their only
motivation is helping you build a strong financial future.
That’s another thing this recession has taught us —
which financial services companies we can really trust
to do the right thing because it is the right thing to do. I
hope you know you can trust USAA, because we work to
earn it every day. ■
Josue (Joe) Robles Jr.
Major General, USA (Ret.)
President & CEO
U SA A . CO M
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COVER FEATURE
USAA
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 T Y
13
FA L L 2 0 0 9 • VO LU M E 4 5 • N U M B E R 3
In Every Issue
A NEW
HORIZON
USAA Online
5
Learn what the USAA
Mobile App can do for you.
Get the big-picture
view of the current
recession and chart
a course forward.
6
FYI
Follow the Wahl family’s
RV journey and get tips for
choosing a strong password.
By John Gilliam
Member Snapshot
11
Troy McSwain II spins
his U.S. Naval Academy
experience into an
unexpected career.
Dollars & Sense
12
Financial expert Jean
Chatzky explores the right
ways to lend to loved ones.
Member Savings
FAMILY TIME:
27
Our guide highlights
products and services
especially for you.
Dealing with Deployment,
Managing Money and More
COVER PHOTO ILLUSTRATION: RYAN ETTER
The ratings are in:
Learn the best small
SUVs for roof strength.
7
18
4
Breaking
the News
22
Financial
Independence
26
A couple deals with
the hardest part of
another deployment
— telling the kids.
By Alison Buckholtz
Follow these tips
to instill good money
habits as your kids
prepare to leave
the nest.
By Teri Cettina
Have a 529 college
savings plan? USAA’s
Wasif Latif provides
timely guidance.
By John Gilliam
USAA MAGAZINE
FdUSFA09_04_TOC.USAA.indd 4
FA L L 2 0 0 9
Ask a
USAA Expert
( 800 ) 53 1 - U SA A ( 872 2 )
8/24/09 9:29:47 AM
usaa online
USAA ON
THE GO
Deposit checks
when you want,
where you want
NEW!
Available
on the iPhone
App Store
SM
Check balances, transfer funds and pay bills.
Plus, qualifying members can even deposit
checks from an iPhoneTM with Deposit@
MobileSM — a new, innovative feature on the
USAA Mobile App for the iPhone.
■
■
It’s free, secure and as easy as
snapping a picture.
Deposits are credited to your account
instantly.*
Plus, the USAA Mobile App
offers other handy tools:
■
ATM locator
■
loan calculator
■
rental car locator
■
accident checklist
*You must qualify for
USAA’s remote deposit
services; eligibility for
USAA property and
casualty insurance and
credit qualification
required. Deposits may
not be available for
immediate withdrawal.
LEARN MORE AND WATCH
A DEMO VIDEO AT
USAA.COM/IPHONE.
NEW!
File an insurance claim
online — easier than ever
Report your claim with help from Natalie, our
new online assistant. She’s there 24/7 to answer
the most frequently asked questions via helpful
video response. If you have a claim to file online,
just go to USAA.COM/Claims.
USAA
EXECUTIVE EDITOR:
Sarah Plaster
MANAGING EDITOR:
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. © 2009 USAA.
U SA A . CO M
FdUSFA09_05_online.indd 5
Jennifer Chappell Smith
Nancy McAllister,
Brian P. McGlinchey, Susan Speer
CONTRIBUTORS:
PRODUCTION AND
CIRCULATION MANAGER:
Lisa Severson
VICE PRESIDENT,
MEMBER COMMUNICATIONS:
Rhonda Crawford
NEW!
Shop virtually
and save
Our online member mall, USAA MemberShopTM,
offers access to more than 500 retail outlets.
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PUBLISHED BY: USAA, 9800
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Magazine, please write to Lisa
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usaa.com
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FA L L 2 0 0 9 U S A A M A G A Z I N E
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8/14/09 7:32:47 AM
F
Y
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PHOTOGRAPH BY BETH PERKINS PHOTOGRAPHY
ON THE
ROAD AT 101
Dorothy F. Davis, age 101 and a 73-year
USAA member, spent five weeks on a
patriotic road trip this summer. Still an
active journalist, this military widow and
Manhattan resident got the travel bug to
visit key military locales across the country.
With her granddaughter as travel companion, she visited with military personnel at
installations from Naval Air Station Willow
Grove near Philadelphia to Fort Carson in
Colorado Springs, where she toured the Air
Force Academy and even stopped at the
USAA regional office, before heading home
to New York. “Whether it was a soldier at a
desk or a guard at a gate, they welcomed us
in a kind and caring way,” Davis says. “There
is nobility in their courtesy. We felt such
pride in them, and look back at our journey
as a series of visits with family.”
After retiring from the military, a mom
and her family take to the road
W
hen most military families
retire, they return to hometowns and settle into civilian
life. After almost a decade
overseas with the Air Force, the Wahl family has spent its first year back stateside
traveling North America in search of the
perfect place to live. “Another objective
was to teach the kids about America, and
I’m learning just as much as they are,” says
Mary Claire, who retired as an Air Force
nurse after 22 years of service. Through
the windshield of their home-on-wheels,
the kids have learned more about the U.S.,
and perhaps more about themselves.
Son Joe has skied the Swiss Alps
and seen the Far East. He and his sister,
Anna, speak fluent German. And younger
brother Sam also thrived in the foreign
cultures the kids experienced. Yet as
Mary Claire’s retirement approached, she
and husband Tom, an adjunct business
writing professor for an online college
program, realized their kids knew little
of the country Mom served. “Our road
trip has been a nice way to transition
from military life,” she says.
With finances in good shape, prior
experience homeschooling their kids and
a well-equipped RV, the Wahls first toured
Western Canada last September. Since
then, they have covered more than 23,000
miles of U.S. highways and visited 40 state
and national parks, where the children
participate in Junior Ranger programs.
They have caught up with family and
friends and reconnected in their tighter
quarters. “It definitely has its challenges.
But every time we pull into another campground, we have another backyard,” says
Mary Claire. “We open the door and the
kids go out and explore.”
After time in New England this summer, the Wahls are heading west again
before they “finally decide where to put
on the brakes,” Tom says.
Follow their progress: web.me.com/
wahlsacrossamerica.
PHOTOGRAPH BY MICHAEL MADRID USATODAY.COM
Search
for a new
hometown
ROADSIDE ASSIST
USAA Bank’s online conveniences, such as Web BillPay®, have helped the Wahls keep
finances in order. And, naturally, these loyal USAA members insure their RV through
USAA. Visit USAA.COM for more on these products and services.
Bank products provided by USAA Federal Savings Bank, Member FDIC.
6
USAA MAGAZINE
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( 800 ) 53 1 - U SA A ( 872 2 )
8/21/09 9:33:44 AM
USAA: Customer Service Star
USAA ranked No. 1 in the 2009 MSN Money Customer
Service Hall of Fame survey. Zogby International, a
market research opinion polling firm, surveyed customer
service for 145 companies. USAA topped the list among
such well-regarded companies as Southwest Airlines
Co., Amazon.com Inc. and Apple Inc.
ROOF STRENGTH — SMALL SUVs
PHOTOGRAPH BY KIMBALL STOCK
PHOTOGRAPH BY MICHAEL MADRID USATODAY.COM
More than 10,000
people are killed in
rollover accidents each
year, according to the
Insurance Institute for
Highway Safety. The
first vehicles to face
the scrutiny of the IIHS’
new roof strength rating
system? Small sport
utility vehicles — fitting,
since 59 percent of
SUV accident deaths
involve rollovers. Next,
the group will test roof
strength of minicars and
midsize cars. For more,
visit iihs.org.
MODEL
RATING
Volkswagen Tiguan
Good
Subaru Forester
Good
Honda Element
Good
Jeep Patriot
Good
Suzuki Grand Vitara
Acceptable
Chevrolet Equinox
Acceptable
Pontiac Torrent
Acceptable
Toyota RAV 4
Acceptable
Nissan Rogue
Acceptable
Mitsubishi Outlander
Acceptable
Honda CR-V
Marginal
Ford Escape
Marginal
Mazda Tribute
Marginal
Mercury Mariner
Marginal
Kia Sportage
Poor
Hyundai Tucson
Poor
Passing
Personal
Finance 101
An overwhelming number of Americans can’t
answer basic questions about personal finance
and investing, says a recent survey by the
Center for Economic and Entrepreneurial
Literacy. It found:
■ Only 47 percent knew the Dow Jones
Industrial Average is an index that measures
the stock performance of 30 large American
companies.
■ Just 57 percent identified
their credit scores as the single most important factor
determining their
ability to get
a loan.
■ Only
48 percent
identified
potentially
tax-deductible
contributions as
a primary advantage of investing
in a traditional IRA.
If you fear you fall
amid those numbers, rise above the uninformed masses by regularly visiting the
Advice & Planning section of USAA.COM.
You’ll find easy-reading articles on nearly
every aspect of personal finance.
ILLUSTRATION BY GORDON STUDER
A STRONG ROOF OVER
YOUR HEAD
REALITY CHECK
Preparing a college student for the real world?
See page 22 to learn how to help them get a firm
financial footing.
U SA A . CO M
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FA L L 2 0 0 9
USAA MAGAZINE
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8/14/09 7:36:20 AM
F
Y
I
How
STRONG
is your
password?
WHY PAY
BILLS
ONLINE?
Save money. Converting
to electronic payments
could save you more than
$100 a year in postage
and checks.
Save your identity.
Nearly 85 percent of
identity theft cases are
traced to paper transactions, including lost or
stolen checkbooks, bills,
statements and check
payments.
ILLUSTRATION BY GORDON STUDER
Save time. E-payments
can save you an average
of 2.5 minutes per bill.
As
identity thieves prowl the Web, they don’t rely
on painstaking guesswork. They’re armed with
password-hacking programs that do the work for
them. If you’re still using the name of your pet or your favorite
sports team as a password, you’re easy prey.
The best hacker-resistant passwords are:
Lengthy: At least eight characters, but longer is better.
Multi-character: Use numbers, symbols, punctuation and
both uppercase and lowercase letters.
Memorable: How do you make a long, complex password
that’s easy to remember? Build it around a sentence. For
example, “At the NCAA tournament, Bucknell defeated Kansas
64 to 63” becomes @tNt,BdK64t63.
■
Save trees. If just 20 percent of households made
the switch, the collective
effect would save more
than 1.8 million trees
each year.
Source: PayItGreen™
Alliance
■
■
TRY USAA WEB BILLPAY®. GO TO USAA.COM
(SEARCH: WEB BILLPAY)
8
USAA MAGAZINE
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( 800 ) 53 1 - U SA A ( 872 2 )
8/21/09 9:32:58 AM
mail call
–USAA member named–
MILITARY SPOUSE
OF THE YEAR
Tanya Queiro, USAA
member, mother of
three and a Marine veteran herself, has been
named Military Spouse
of the Year by Military
Spouse magazine. Married to Marine Gunnery
Sgt. Jose Queiro, Tanya
balances a full-time
career, community volunteer work and her
pursuit of a doctorate
degree, while accomplishing her mission as a
military wife and mother.
Kudos to USAA fund manager
I was very impressed with “Fear and Greed” (Summer
2009) featuring Margaret “Didi” Weinblatt, manager of the
USAA Income Fund and the USAA GNMA Trust. What
wisdom in a few words. Thank you, Didi, for the abilities
you provide to the funds. ■ Charles Owen, Florence, Ky.
PHOTOGRAPH BY BROOKS KLEVEN AND JENNIFER WILSON
What taxes?
In “Where to Get Money Now” (Summer 2009) the blurb
regarding borrowing against life insurance states that if
you die before paying the loan back, “such misfortune
can trigger significant taxes for survivors.” How can this
possibly trigger taxes? ■ Ava Hayes, Cedar Creek, Texas
Ed. Note: In fact, no income taxes result if you die before paying back a loan from life insurance. The article should have
stated that a life insurance policy with cash value in excess
of premiums paid has a gain, which could result in income
taxes due on that gain if the policy lapses. We regret the error.
Employers pay
NEED AN
UMBRELLA?
B E ING HE LD L I AB L E
for property and personal
damages is a risk we all
face as we drive cars, invite
guests to our homes and
simply live our lives. Auto,
homeowners, renters and
boat insurance provide liability protection — but coverage limits may not
be enough. And the
wealthy aren’t the
only ones at risk. Even
middle-income families
can face devastating rulings
that destroy their financial
foundation. That’s where an
umbrella policy comes in.
What is it? An extra layer of liability coverage that protects you
and your family anywhere in the
world over and above what’s provided by your auto and property
insurance. Available coverage
limits range from $1,000,000
and above.
How does it work? Suppose you were responsible
for a car accident involving
multiple cars. The liability
coverage from your auto
policy may not be enough
to cover the injuries from
several people as well as the
property damage to all of the
cars. Liability protection from
an umbrella policy would provide an additional $1,000,000
(or more) of coverage where
your auto policy left off.
What’s the cost? Widely considered one of the best values for the
protection it provides, premiums
can be as low as $19 a month for
a million dollars of protection —
it can be an inexpensive way to
protect your family’s assets.
GO TO USAA.COM (SEARCH: UMBRELLA)
U SA A . CO M
FdUSFA09_06-10P_06-09R_FYI.USAA.indd 9
“What to do after a layoff” (Summer 2009) says: “Part of
the money that’s taken out of your paycheck each month
goes to fund unemployment insurance.” While not entirely
false, it is blatantly inaccurate. Only three states — Alaska,
New Jersey and Pennsylvania — have “minimal employee
contributions.” In these difficult times, you owe it to your
readers to give them accurate information. ■ Lt. Col. Ross
Rainwater, U.S. Army (Ret.), Brentwood, Tenn.
Ed. Note: Indeed, according to the U.S. Department of
Labor, only the three states you mention require employee
contributions to unemployment insurance, while in the
majority of states, benefit funding is based solely on a tax
imposed on employers. Thanks to you and others who wrote
to point out the mistake.
T@lk to us
Be our fan on Facebook®. Log on to your Facebook
account and search for USAA.
Follow USAA at twitter.com/usaa_news.
E-mail us. Log on to USAA.COM and use search
term Contact Us. Click the top link for Contact
Us and on the right side of the page under Send
Us an Email, click Start a New Conversation with
USAA. Put USAA Magazine in the subject line.
Write a letter. USAA Magazine, Mail Call,
E-1-E, 9800 Fredericksburg Road, San Antonio,
TX 78288-3533. Please include a daytime
telephone number.
FA L L 2 0 0 9
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8/14/09 7:37:43 AM
F
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ILLUSTRATION BY ART VALERO / CORBIS
Retirement
distribution
relief
ACT
NOW
A
mericans 70½ and older
are normally required
by the Internal Revenue
Service to withdraw
some of their retirement savings
each year — but in 2009, they
get to let it ride. To help retirees
preserve their savings during
volatile economic times, the
government has suspended
required minimum distributions
for this year only.
■
■
■
The RMD relief applies to IRAs, 401(k)s, 403(b)s and other “defined
contribution” plans.
Owners of inherited retirement accounts also get to skip this year’s
distribution, regardless of their age.
If you already took your distribution, you may be able to reinvest it
within 60 days — per IRS rollover rules.
“This is an excellent opportunity to keep these funds tax deferred
if you do not need the money for living expenses,” says Paul Fulmer,
executive director of retirement products at USAA. Learn more at
www.irs.gov.
For help, call USAA for free financial advice at (800) 531-USAA (8722).
PREVENTING ELDER FRAUD
SENIORS CAN find themselves barraged by
solicitors with financial scams — from pyramid
schemes to bogus contests and risky investments.
But elder fraud can hit closer to home if vulnerable seniors fall prey to malicious but trusted
caregivers who might forge checks, abuse
credit cards or embezzle funds. Some
seniors succumb to even more sinister forms of elder fraud, from
physical and emotional abuse
to neglect and exploitation.
If you’re worried that an
older friend or loved one is
being taken advantage of
financially or in any other way:
10
USAA MAGAZINE
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Report it. Contact your local adult
protective services agency. For state
reporting numbers, visit the National
Center on Elder Abuse Web site at
www.ncea.aoa.gov or call the Eldercare
Locator at (800) 677-1116.
■ Maintain communication.
Talking with your elder friends,
neighbors and relatives will
help decrease isolation, a risk
factor for mistreatment. It
will also give them a chance
to talk about any problems
they’re facing.
■
Be on the lookout. Recognizing early
indicators, such as confusion about their
financial situation, physical bruises or
anxiety, can help prevent abuse.
■ Encourage prevention. Suggest they
put themselves on the National Do
Not Call Registry; DoNotCall.gov or
(888) 382-1222. Let them know it’s
not impolite to hang up on hyperaggressive telemarketers, who have so
little regard for their time and feelings.
And get to know strangers who suddenly become interested in your loved
ones’ personal affairs.
■
( 800 ) 53 1 - U SA A ( 872 2 )
8/14/09 7:38:49 AM
member snapshot
Tailor made
photograph by Jeff Newton Photography
A former football player at the
U.S. Naval Academy and a fashion
designer to celebrities may not
seem cut from the same cloth.
But Troy McSwain II is both
Troy McSwain II
USAA member since 1981
Troy McSwain II
once laced up cleats
and wore football pads on the gridiron, playing for the U.S.
Naval Academy. Today, he handles silks and tweeds instead.
McSwain custom-designs stylish suits for a niche clientele of professional athletes and other celebrities, from
the NBA’s Byron Scott, coach of the New Orleans Hornets,
to NFL greats such as Terry Bradshaw. Basketball players
show up for NBA Draft Day impeccably dressed in the
Beverly Hills, Calif., clothier’s designs, and magazines from
Esquire to GQ have featured his work.
photography BY XXX
The Academy Advantage
“I counted on football, so when I left the Academy, I was
overwhelmed and unsure of what I would do next,” says
McSwain, who played wide receiver. A chance modeling
opportunity gave him a new direction. “The Academy
taught me to carry myself with confidence, which put
me a step ahead of the other guys out there,” he says. As
McSwain got older and modeling jobs faded, he learned
the business side of fashion design and set up his own
shop, Troy McSwain Custom Wardrobe Designs.
u sa a . co m FdUSFA09_11P_MembSnap.USAA.indd 11
Volunteering to design suits for one NFL player led to
work for up to 2,500 clients, by his estimation, since the
mid-1990s. Now he travels to custom-fit clients and sometimes to hand-deliver suits to them before big events.
McSwain says the Naval Academy gave him the foundation to succeed. “You leave the Academy with discipline
and integrity,” says McSwain. “I learned to get up each day
with purpose and to be impeccably polished every time I
walk out my door. The Academy taught me to be punctual
and meticulous and to remember even the tiniest detail.
My clients see that in me. They want that for themselves,
and I help them create that image.”
Giving Back
McSwain takes his message into schools, where many
kids dream of a pro sports career, much like he did.
“I tell them there’s about a one-in-a-million chance of
that happening, and if it does happen, it’s brief,” he says.
“I tell them they need a more solid plan. The military
isn’t the choice for everyone, but it was what put
me ahead.” n
fa l l 2 0 0 9 u s a a m a g a z i n e
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8/21/09 11:27:03 AM
dollars & sense
BY JEAN CHATZKY
Tough love lending
“Brother, can you spare a dime?” Here’s how to respond
when family and friends put you on the spot
ready way to lose your
friend is to lend him money.
Another equally ready way
to lose him is to refuse to
lend him money. It is six
of one and a half-dozen of the other.”
George Jean Nathan, the noted drama
critic and editor, said that. Chances are
your parents — like mine — repeated it in
some form or another. Why? The thinking has been that whether we’re talking
about friends and money or families and
money, the two simply shouldn’t mix.
That was an easier line of advice
to peddle, however, before the credit
crunch. When mortgage dollars, credit
card lines and private student loans
flowed freely, you knew the person asking you to part with your hard-earned
money could likely get cash somewhere
else. Now, that’s not the case.
So, consider these tips for smart lending in the post-crunch environment.
See if you can dodge the bullet.
Frankly, there is much that can go wrong
in a loan between friends. Money can be
paid back late or not at all. Terms can be
misunderstood. Interest can be forgiven
then tacked on, tacked on then forgiven.
Parties can stop communicating for all
sorts of reasons.
Here’s the first thing you should do
when approached for a loan by a friend
or relative: Offer to help with information
instead. Volunteer to sit down with the
person who needs funds and help look
for loans from the U.S. Small Business
Administration, a bank or elsewhere.
Next, consider offering a gift. It’s
cleaner. It’s easier. And you can always
say: “This is really all I have to give. I am
pleased to be able to do it, but in return,
please don’t ask me again.”
Suggest borrowing from a person you don’t know. Explain to your
friend that a more anonymous source,
like a bank, might make everyone feel
more comfortable than borrowing from
friends or family.
But as they search for anonymity,
some people who are not able to secure
a loan from a bank are turning to peerto-peer lending Web sites. Advise your
friends to use caution.
Before you or a friend in need consider using such online lenders, follow this advice from Rich Lunsford, a
CERTIFIED FINANCIAL PLANNER™ practitioner
with USAA:
■ Research the lending site with
the Better Business Bureau at bbb.org.
The U.S. government has shut down
some peer-to-peer sites until they meet
federal regulations.
■ Be aware that the online lending
business will check your credit history,
just like a bank, before making the loan
and will turn you over to a collection
agency if you don’t pay on time.
■ Before signing the agreement, thoroughly read it and understand any fees
related to applying for the loan, paying it
off early or missing a payment.
■ Pay on time, or your interest rate
could jump.
Put any loan you make in writing.
If you do go the loan route, the very best
thing you can do is treat it unemotionally and as much like a standard
business transaction as you can.
That means putting the loan
terms — interest or no, repayment
by the month or in full — on paper in the
form of a promissory note that sets a rate
on the loan amount. And consider consulting a tax or financial advisor for help.
Perhaps in your case things will go
smoothly and you’ll feel that having a
written record is icing on the cake. But
if things don’t go well, having this sort
of paperwork goes a long way toward
preserving the relationship. ■
When mortgage dollars,
credit card lines and private
student loans flowed freely, you
knew the person asking you
to part with your hard-earned
money could likely get cash
somewhere else. Now, that’s
not the case.
Jean Chatzky,
award-winning
journalist, bestselling author
and motivational
speaker, is helping
millions of men
and women battle
debt. Her newest
book, The Difference:
How Anyone Can
Prosper in Even the
Toughest Times
(Crown Business),
debuted in March.
Certified Financial Board of Standards, Inc. owns the certification marks CFP® and
CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals
who successfully complete CFP Board’s initial and ongoing certification requirements.
12
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Your finances have no doubt been
affected by the stormy seas of the past year.
USAA stands ready to help you chart a course forward
BY JOHN GILLIAM
A
NEW
HORIZON
“This recession is a product of a
full-blown credit contraction, as both financial
institutions and households repair their balance sheets.
Because of this, the recovery is likely to take longer than
prior postwar recession recoveries and exhibit lower growth
than the U.S. has enjoyed in recent decades.”
—John Toohey, USAA vice president of equity investments
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8/21/09 11:52:35 AM
?
EVERYONE’S
ASKING: IS THE
WORST OVER
The stock and bond markets told us in the spring
that we may have seen the bottom of this economic
cycle based on the sharp rally off the lows of March 9.
The markets reacted to signs that many of the government’s stimulus efforts were gaining traction.
Bad economic data came less often, and in some
cases the numbers improved.
PHOTO ILLUSTRATIONS BY RYAN ETTER
As hope took hold, summer gave way
to a more somber view of the speed and
shape of a potential recovery.
Consumers continue to cope with
the ongoing recession while trying to
rebuild retirement and investment
accounts — resulting in a new economic
reality for most.
Markets look gloomy one week,
rosier the next. Foreclosure filings rose
15 percent for the first half of 2009
versus the first half of 2008, according to
RealtyTrac®, but government agencies
SEPT
’08
TIMELINE : THE EVOLUTION OF A CRISIS
OCT
’08
15
16
Bank of America
announces intent to
take over Merrill Lynch;
Fed
authorizes
$85 billion
bailout of
AIG
7
Fannie Mae
and Freddie
Mac placed
into government
conservatorship
reported newly constructed home sales
jumped 11 percent in June. The unemployment rate nears double digits and
the U.S. auto industry operates as a
shell of its former self, but manufacturing is showing some signs of stabilization. Banking and financial sectors face
pressure, but have posted a substantial
recovery in earnings in 2009.
“Economic data remains decidedly
mixed,” says USAA’s John Toohey, vice
president of equity investments. “It looks
as if we are in for a gradual economic
Lehman Brothers
files for Chapter 11
bankruptcy protection
14 U S A A M A G A Z I N E
17
SEC
temporarily
bans “short
selling”
20
U.S. Treasury
submits Troubled
Asset Relief Program,
known as TARP, to
Congress to purchase/
hold troubled assets
25
29
3
Washington
Mutual
closed by
Office of
Thrift
Supervision
House
rejects
TARP
$700
billion TARP
passed and
signed into
law
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15
HOW IT ALL
STARTED
recovery, but we still have faith in the ability
of the U.S. economy to return to a course of
sustainable growth.”
The not knowing is the tough part.
But the U.S. Commerce Department reports
the economy contracted by just 1 percent in
the second quarter of 2009, less than analysts
expected and a sign the recession may be easing. “Last fall, as the crisis unfolded, consumers
questioned credit tightening and wondered if
their banks would fail, but a bigger question
emerged,” says J.J. Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA. “People
asked, ‘Hey, is the whole financial system going
to collapse?’ A year later, we see that it has not.”
With that reassurance, warier and wiser, we
look toward what’s on the horizon. “No one has a
crystal ball,” advises Montanaro.
But we can assess where we are and consider
what we should do in the face of an uncertain
economic future.
THE PEAK OF THE CRISIS IS HARD TO PINPOINT , but
many point to September 2008, when the Treasury secretary went
to Capitol Hill to brief congressional leaders. He predicted a complete
collapse of the global financial system if Congress didn’t act immediately to rescue big banks by buying up their toxic assets.
But the crisis started well before then. The first sign appeared in
late 2006 and early 2007, when subprime mortgage lenders started
going under.
In summer 2007, USAA’s Cliff Gladson, senior vice president of
fixed income investments, saw worrisome signs that institutional
investors and hedge funds were selling municipal bonds to cover their
losses on more risky investments. Such actions by more and more
entities helped ultimately ravage the markets.
But the stock market didn’t seem to mind the credit crisis, moving
higher until October 2007. The overall economy seemed fine, too,
except for the real estate market, which some described as a healthy
cooling off. We now know the recession began in December 2007,
mostly undetected and unnoticed. And in January 2008, between
regular meetings, the Fed cut rates dramatically.
Then in March 2008, JPMorgan Chase & Co. acquired The Bear
Stearns Companies Inc. with the help of the Fed and Treasury at a firesale price. Short sellers, investors who hope to profit when a company’s stock price falls, started going after Fannie Mae and Freddie Mac
in the summer. They moved like locusts, attacking the stocks of one
financial giant after another. Then came September 2008, the most
harrowing month of all.
By October, the Treasury announced that the Troubled Asset Relief
Program would inject capital directly into banks instead of buying
troubled assets, a change that occurred as policymakers reacted to
the unfolding crisis. Americans asked: Was this really happening in
the United States of America? Anxious consumers stopped spending
and demand went into a free fall.
Now, economists are monitoring the data and consumers are waiting and watching to see how the recession plays out.
Getting our bearings
After last fall’s dramatic economic news, consumers stopped spending as demand plummeted. Federal Reserve Chairman Ben Bernanke, a student of
the Great Depression, knows what can happen if
you allow demand to collapse in a huge, complex
and highly leveraged economy. It’s deflation, and
it can be ugly. Deflation means that companies,
desperate to attract business, lower prices. That
can be great for consumers, but it can create a
vicious cycle — consumers, already feeling pinched, may not spend despite low prices, and demand falls still further. Profits suffer. Businesses lay
off employees. Prices fall, and the cycle continues.
NOV
’08
15
12
14
Fed announces
Wells Fargo,
not Citigroup,
will acquire
Wachovia
U.S. Treasury
announces
TARP will first
inject capital,
not purchase
assets
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10
AIG gets
$40 billion
more, this
time under
TARP
DEC
’08
12
18
23
Treasury
Secretary
states TARP
won’t purchase
troubled
mortgage
assets
Big Three
auto execs
appear before
Congress,
requesting
bailouts
Citigroup
gets second
bailout, more
government
backing
11
National Bureau
of Economic
Research
announces that
recession began
in December
2007
16
19
Fed cuts
rates to
virtually
zero
U.S.
Treasury
authorizes
TARP loans
to GM,
Chrysler
FA L L 2 0 0 9 U S A A M A G A Z I N E
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8/21/09 11:54:06 AM
Bernanke, Congress and the administration
decided to combat potential deflation by flooding money into the system, with more than
$12 trillion in deficit spending, stimulus packages and government support. They seem to
feel it will be easier to rein in any inflationary
effects down the road than to allow a deflationary spiral to take a firm hold.
The stimulus being applied by the
government today is almost four times as
high (as a percentage of gross domestic
product) as in the Great Depression, notes
Renaissance Investment Management
using data published by the Congressional
Budget Office. Toohey and his colleagues
in the USAA Investment Group, along with
most analysts, believe that this level of government spending could provide a strong
enough financial tailwind to help push us
out of the current economic doldrums.
A bigger
question
emerged:
People
asked,
‘Hey, is
the whole
financial
system
going to
collapse?’
A year later,
we see
that it has
not.
Navigating uncertain waters
So what if Toohey and his team are right?
That is, we avoid the worst-case scenario of
an economic depression, but have a gradual,
uneven recovery. Investors have challenging
decisions to make.
“The last thing an investor wants to do
right now is react to the latest sentiment,” says
Cliff Gladson, USAA senior vice president
of fixed income investments. “The markets
lately go from obsessing about black clouds
to cheering green shoots and back again in a
matter of days, all based on the latest piece
of data. Yes, this is an environment for active
management of your investments, but within
the context of a diversified portfolio that’s
geared to your risk level and time horizon.”
His colleague Wasif Latif, USAA vice
president of equity investments, sees that
12
At President-elect
Obama’s request,
President Bush asks
for remaining $350
billion of TARP
16
16
Treasury, Fed and
FDIC announce
second bailout,
more backing for
Bank of America
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Deciding your next move
USAA experts agree that there are particular
investment strategies to consider during this
time of uncertainty. However, they say the
first step is to look at your overall investment
portfolio within the context of a financial
plan rather than focus on an individual investment or the latest hot sector. As you move
forward, consider:
■ USAA Target Retirement Funds, with
well-diversified portfolios geared to become
more conservative as your retirement date
approaches.
■ USAA Strategic Fund Adviser® or a
managed trust portfolio with USAA Trust
Services. These attract USAA members
daunted by constructing their own portfolios
and offer active management by USAA.
— J.J. Montanaro,
CERTIFIED FINANCIAL
PLANNER™
practitioner
with USAA
FEB
’09
JAN
’09
members are moving in significant numbers
toward managed portfolios, rather than taking on the burden of managing investments
themselves. “It’s a false choice to say an investor either has to passively buy and hold or
constantly make investment decisions,” he
explains. “Instead, many appreciate having
an investment manager they trust actively
manage risk on their behalf.
“None of us knows exactly how this will
play out, but we do know that losses hurt
more than gains help. We do know that some
investors — and investment managers — were
taking on too much risk ahead of the crisis,
based on overly optimistic assumptions about
the stock market. It’s our job to keep a steady
hand on the tiller and steer a course to what
we see as current opportunities.”
As part of a plan to hedge the potential inflation risk of your portfolio, consider diversifying
MAR
’09
3
25
2
Fed extends
liquidity programs
set to expire on
April 30
Officials
announce
“stress tests”
of big banks
AIG announces
2008 loss of $99.3
billion; Treasury and
Fed restructure
AIG bailout
3
9
Fed launches Term
Asset-Backed Securities
Loan Facility, known as
TALF, to support
credit markets
U.S. stock market
bottoms, with the
S&P 500 Index
down 56.78% from
October 2007 high*
( 800 ) 53 1 - U SA A ( 872 2 )
8/21/09 11:55:43 AM
17
into a small slice of these asset classes to help
create a more defensive position:
■ Precious metals and minerals. Gold can
profit in both inflationary and deflationary
environments, and also tends to shine when
the dollar weakens.
■ High-yield bonds. They offer a riskcontrolled way to potentially capture the
recovery in the equity market. They’re less
volatile than stocks and less sensitive to rising
rates than most other types of bonds.
Keep in mind that diversification is a
technique to help reduce risk, but there’s no
absolute guarantee that diversification will
protect against a loss of income.
For investors wishing to take advantage of
growth opportunities as the global economy
recovers, consider:
■ Emerging markets. Rapidly developing
countries — especially China, India and Brazil
— are positioned to potentially outperform as
the world economy recovers.
■ Science and technology funds. Innovation continues even during uncertain
economic cycles, and two of America’s most
innovative industries are technology and
health care.
Toohey and his team also see attractive
opportunities in the fixed-income arena:
■ Investment-grade corporate and municipal bonds. Showing a strong rally in 2009,
these fixed-income asset classes continue to
offer attractive yields and the potential for
some price appreciation.
■ Bond funds. The type of bond fund that
might work best for you depends on your
marginal tax rate and the tax status of your
investment account.
APR
’09
Moving ahead
In this new era of America’s economy, investors chart their courses.
Consumers set aside more
savings. Workers value their
jobs more than ever. And
one of the biggest causes
for optimism may be that
we’re grinding through
this recession.
At a lecture this financial
writer attended, a speaker
talked about money as the
biggest nonspiritual act of
faith in the world: I work for
you, you pay me and we both
believe I can take your currency
to buy food, shelter and consumer
goods. We trust each other’s signature as
a commitment to pay. On this basis the
wheels of commerce are greased and a
great financial system was built.
Though many USAA experts agree
that the recovery will be gradual, they
continue to believe in the strength of the
American capitalist system. ■
Certified Financial Planner Board of Standards, Inc. owns
the certification marks CFP® and CERTIFIED FINANCIAL
PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board’s initial and
ongoing certification requirements.
Investing in securities products involves
risk, including possible loss of principal.
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.
MAY
’09
JUN
’09
2
7
21
Financial Accounting
Standards Board approves
new guidance to ease
accounting of
troubled assets
9 of 19 biggest
TARP banks
pass stress tests
S&P lowers
outlook on UK
government debt
to negative
24
USAA
PORTFOLIO
PLANNER
Let USAA recommend an
investment portfolio for you.
To use the Portfolio Planner tool, go to USAA.COM
(search: Savings & Investment
Calculators). Or, call (800)
531-USAA (8722).
JUL
’09
AUG
’09
21
12
The SEC proposes rule
Chairman Ben Bernanke
amendments to strengthen testifies before Congress that
the regulatory framework
“investors are returning to
for money market funds
private credit markets”
Fed keeps federal funds
rate at low 0 to 1⁄4 %,
says economic activity
“leveling out”†
Timeline Sources: Federal Reserve Bank of St. Louis; *USAA Data; †The Federal Reserve
17
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17
8/21/09 11:56:24 AM
1, of the
1
/
9
e
c
n
i
S
mericans
A
n
o
i
l
l
i
1.9 m
eployed,
d
e
v
a
h
who
arents.
p
e
r
a
0
876,00
ay twice,
w
a
n
e
e
have b
d
245,000
times an
e
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91,00
re times.
o
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o
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ou
48,000 f
efense
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epart
Source: D
Recalling
lessons
learned from
her husband’s
most recent
deployment,
a military spouse
debates when to
let her son and
daughter know
about Dad ’s
return to Iraq
18
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Breaking the
NEWS
( 800 ) 53 1 - U SA A ( 872 2 )
8/21/09 9:35:41 AM
BY ALISON BUCKHOLTZ
“Have you told
the kids yet?”
The Buckholtz
family: Alison and
Scott, with Ethan,
6, and Esther, 4
hat’s usually the first question people
ask when I mention that my husband,
Scott, an active-duty Navy pilot, is preparing for a 12-month assignment in
Baghdad. In my memoir, Standing By,
I wrote in detail about all our two children experienced during Scott’s seven-month deployment last year, along with my struggle to keep them
happy and healthy during that time. Many readers felt
a bond with the kids, Ethan, now 6, and Esther, now
4, and so their question is heartfelt. After all, Scott’s
upcoming absence will last twice as long as his last
deployment. He has two months of training at bases
across the U.S. before the assignment even begins, and
he’s been home barely a year.
As Scott and I count down the time we have
together, we plow through the usual
items on our predeployment checklist.
■ Power of attorney? Done.
■ Car tuneup? Done.
■ Automatic billing? Done.
This time, though, the circumstances of the unexpected assignment have prompted us to take
additional steps. Following a tough
conversation, Scott is purchasing
more life insurance. And we have
decided to move cross-country,
so that the children and I can be
closer to extended family.
Logistically, everything is in place. But that’s
different from feeling ready. And that’s why we haven’t
told Ethan and Esther yet.
The waiting game
PHOTOGRAPHY BY MATT MENDELSOHN PHOTOGRAPHY
While we wait, trying to settle on the best way to explain
another long separation, we do our best to create happy
family memories. We booked a long-delayed trip to
Walt Disney World, where we’re spending two weeks
before Scott’s departure. We’re going to surprise the kids
with Mickey Mouse ears the moment we step onto the
plane. We ordered an enormous wooden play set for the
backyard of our new house, to be installed the day we
move in. We promised the kids a tank full of fish and the
colorful aquarium accessories that prove so beguiling to
a child’s eye.
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8/21/09 11:59:01 AM
There’s an unspoken, irrational calculus
behind these efforts. It goes something like this:
If we have a wonderful time at Disney World, the
kids will reflect on the adventure with joy, making Scott’s absence easier to bear. If there’s a play
set in the backyard, maybe the kids will stay
distracted and won’t miss their dad as much. If
they can bond with their tropical fish, it will
shield them from hurt.
I laugh when I freely admit to friends that
our guilt goes into overdrive sometimes. But
these strategies are the only way we can gain
control over our situation. My husband and I
can’t always give our children what they need
the most: time with both Mom and Dad. I’m unable to fix the situation, which is what mothers
are supposed to do. So as the countdown clock
ticks away our hours together, we do our best
to stay positive, make the best of the situation
and distract our children from what’s to come.
Part of a bigger family
Our plight is far from unique. Frequent, lengthy
and repeated deployments are the new normal for
many military families. Since 9/11, of the 1.9 million Americans who have deployed, 876,000 are
parents, according to the Department of Defense.
WHERE TO FIND SUPPORT
www.ecrc.navy.mil. Resources for IA family members under
“IA family support”
■ military.com/registration/spouse. The site’s military spouse network
■ militaryonesource.com. General resources for families
■ milspouse.com. Military Spouse magazine and Web resources
■ militarytimes.com. News and resources
■ trooptube.tv. Video-sharing site for military families
■ unitedthroughreading.org/military. Allows deployed parents to send
videos to children at home
■ USAA.COM Search Military Deployment Checklist or Deployed Member Benefits.
■
20
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Of these, 245,000 have been away twice, 91,000
have been away three times and 48,000 have been
deployed four or more times. These numbers highlight the increasingly grueling deployment cycles
endured by today’s career military families.
But there are still surprises in store for these
old pros. The new normal includes a new kind of
deployment, called an IA. It’s short for “Individual Augmentee,” and refers to a service member
who is individually assigned to another unit to
fill a specific and needed role. Navy and Air
Force members given IA assignments usually
augment other services’ units.
In our case, my husband, who has been in
the Navy for 19 years, will become part of a joint
unit working to reduce casualties and to provide
specialized equipment, training and technical
expertise to units in the Multi-National Corps Iraq. For military spouses like me, used to the
camaraderie of a squadron — and the valuable
information that is regularly distributed to the
group — the IA is daunting because there’s no
social infrastructure to tap into. In a typical squadron or unit spouse club, family members have a
trusted, authorized source to turn to for news on
troop movements or for general updates. This role
is often filled by the commanding officer’s spouse.
In our squadron, for example, since my husband
was the commanding officer, I relayed training
and deployment dates and other pertinent information during his last deployment. This helped
families plan their lives, rather than feel like they
were in limbo until a loved one’s homecoming.
( 800 ) 53 1 - U SA A ( 872 2 )
8/24/09 9:35:52 AM
TOP10:
COPING WITH
DEPLOYMENT
Experienced in dealing with a spouse’s deployment,
writer Alison Buckholtz shares her top tips
1. Welcome imperfection. Let go of self-imposed rules, like
getting the dishwasher loaded immediately after breakfast.
This will allow you to spend more time with kids at home
who may be needy following a parent’s deployment.
2. Re-create your family temporarily. Understanding that we
were a family of three during my husband’s deployment,
rather than a family of four, allowed us to get on with life
rather than feeling the hole in our family.
3. Keep things simple. Don’t set your sights on overly
ambitious goals during your partner’s absence.
This time, I will face my husband’s deployment more or less solo. Of course, there will be
questions from my kids.
Before he leaves
And so we find ourselves in limbo now, during
the predeployment period. My husband is at
my side, and we’re trying to live in the moment,
but we’re also counting down our time together.
Planning intelligently for a yearlong separation
means that our thoughts are always turning to
the challenge ahead. This weight has been with
us for nearly eight months, since we first found
out about the assignment. Yet when I discovered
that a friend learned of his IA only two and a
half weeks before he was required to leave, that
seemed equally agonizing. “There’s just no good
time,” he said, shaking his head.
And that’s exactly what we’ll have to overcome when we decide to tell the children that
Dad is leaving again. There’s no good time.
There’s only the reality of the situation, and the
need to face it with strength and hope — for their
sake as well as ours. ■
4. Cry. Most military wives quickly absorb the message to
never stand out in a crowd. But keeping a stiff upper lip
isn’t the answer for everyone.
5. Accept help. If a neighbor proposes to watch the children, if
a relative hints that he’ll mow the lawn or if a friend offers to
bring you a meal, say, “Yes!”
6. Make new connections. Go to a military
spouse gathering, or join a book club or
walking group, anything that will give you
something interesting to do during a
difficult time.
7. Reset your internal clock. Repackaging
the deployment into smaller chunks,
perhaps a month at a time, can help
make the situation more manageable.
8. Volunteer in the military community. Working for another
military organization, or for on-base agencies, may give you
a chance to see how other families weather the storm.
9. Be a hero to your child. Turn an ordinary afternoon around
by ditching the usual after-school activities and going out
for ice cream, painting your own pottery or hanging out at
the park.
10. Get perspective. Instead of spending leisure time at the
mall, focus on areas known for their natural beauty and
outdoor activities. You may be inspired to put the current
countdown into perspective.
USAA: HERE TO HELP
USAA knows the military like no other organization. We stand ready to help
with a host of discounts, special services and support. You may qualify for:
■
special low rates on credit cards when you notify us of a deployment.
three months of free home security monitoring during deployment.
■ savings on auto insurance if you store your car, remove drivers or change your coverage.
■ life insurance policies with benefits tailored for the military, including Military Protection
Plus, a free benefit for active-duty members.1
■ special property insurance coverage for military members.
GO TO USAA.COM
(SEARCH: DEPLOYED
MEMBER BENEFITS)
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IND
ILLUSTRATIONS BY LEIGH WELLS
TEACH
YO
22
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UR C
BY TERI CETTINA
FINANC
NDEPEN IAL
DENCE
YO UR
CHILD T
O HAVE
IT, AND
THEY’LL
REAP
REWAR
DS FAR
DOWN
THE RO
AD
It’s a great time for
parents to teach real-life lessons
about money. “In the past year,
college savings plans may have
had big losses, or a friend’s parents
might have lost a job or a house,”
says USAA member Susan Beacham, founder
and CEO of Money Savvy Generation. “Our
kids are paying attention.”
While they’re listening, start talking —
and help them gain financial smarts.
Kids clamor for independence, but
when it comes to money, many young
adults aren’t as interested in becoming selfsufficient. Some of them, dubbed boomerangers, even move back home after college
graduation or starting a job. But too much
parental help might hinder a crucial rite of
passage — financial independence.
Nudge your kids toward financial literacy.
The payoff: You won’t be making waffles for
your unemployed 30-year-old when you’d
rather be enjoying an empty nest.
U SA A . CO M
FdUSFA09_22-25P_20-23R_Indep.USAA.indd 23
FA L L 2 0 0 9
USAA MAGAZINE
23
8/21/09 9:40:41 AM
why and they can help
brainstorm solutions.
GIVE THEM
A PLAN. Ease
your child into the
world of self-sufficiency
with a financial
responsibility plan.
“Decide with your
spouse what financial
skills you’d like to turn
over to your child at
what age. Then train
him ahead of time
so he’ll be ready for
each task,” suggests
Beacham.
For example, once
your teen has experience with an allowance, increase the
number of spending
categories she handles.
Birthdays are good
milestones to establish
new spending habits.
“At 16, you’ll have to
pay for a tank of gas a
month,” you might say.
By age 18, she might
be required to pay half
of her car insurance.
The choices are yours.
24
USAA MAGAZINE
Never spring new
money responsibilities
on your child without
warning. “Let your
child know what you’ll
expect a month from
now, a year from now
and when he graduates. No surprises,”
says Beacham.
MAKE
FAMILY
MONEY VISIBLE.
“Just a generation or
two ago, families kept
jam jars on the kitchen
counter labeled rent,
food, utilities and
more,” says Arun Abey,
coauthor of How Much
is Enough? Making
Financial Decisions
That Create Wealth
and Well-Being. “Kids
developed an innate
understanding of
money and budgeting.”
You don’t need
to go back to money
in jars, but share your
family’s monthly budget, suggests Abey.
That way, when money
is short, kids will know
FA L L 2 0 0 9
FdUSFA09_22-25P_20-23R_Indep.USAA.indd 24
AVOID
OVERINDULGENCE.
Keep your teen’s
allowance modest
enough that he’s
motivated to save for
things he wants and
eventually to get a job.
If you’re financially
supporting your
college-age kids, a
small stipend will
ensure that they’ll
need roommates and
second-hand furniture.
“Most kids won’t be
able to afford a high
lifestyle when they
graduate — unless they
go into debt. Do them
a favor and help lower
their standards now,”
says Beacham.
MAKE A
CONTRACT
DEAL. Require your
child to talk with you
before signing any
financial contracts —
particularly for credit
cards. A recent study
by Sallie Mae, the
country’s largest
student loan provider, reveals that the
average college student carries $3,173 in
credit-card debt.
That’s a 46-percent
increase over the past
four years. And
nearly one-third of
students now put their
tuition on plastic. “If
your kids talk to you
before they apply for
credit cards, at least
you have one more
chance to talk to them
about other options,”
suggests Beacham.
DON’T
ALWAYS
BAIL THEM OUT.
At some point, your
teen is sure to come
up short of cash.
That’s a good thing,
according to Abey,
since it’s the best way
for them to learn to be
more careful.
The cardinal rule:
Never give teens who
live at home advances
on their allowances,
unless you want to
teach them to rely
on payday loans and
credit cards as adults.
Instead, review your
teen’s expenditures.
If he’s unsure what
he spent, consider
requiring him to keep
his receipts the next
month — as a condition of receiving
his allowance.
If your college-age
student asks for help
with credit-card debt,
brainstorm ways to
pay it off, but don’t
write that check, says
Beacham. “You’re not
doing him any favors
if you teach him you’ll
always be there to fix
his mistakes,” says
Beacham. Instead,
talk about options like
taking fewer classes
or cutting back on
non-necessities.
( 800 ) 53 1 - U SA A ( 872 2 )
8/21/09 9:45:47 AM
option is to help him
open a Roth IRA. He’s
eligible for one if he
has earned income.
“Not only will you
teach your child how
much more quickly
his money can potentially grow when it’s
invested, you’ll prime
him for investing in
his retirement plan
and for other goals
when he’s an adult,”
says Abey.
J.J. Montanaro, a
CERTIFIED FINANCIAL
PLANNERTM professional
with USAA, suggests
more lessons about
investing can come
from talking about
your own retirement
investing habits.
“Explain how your
401(k) works and how
money can compound
over time,” he says.
“You can even create
your own matching
program for a college
student’s savings.”
EXPLORE
FINANCIAL
CLASSES AND
OTHER
RESOURCES.
The sooner students
take a high school
personal finance
class, the better they
score on standard
financial literacy tests,
according to a study
by The Jump$tart
Coalition for Personal
Financial Literacy.
The assumption is
that younger kids
absorb new information more easily.
University students, on the other
hand, do better on
financial literacy tests
every year they stay
in college, since their
problem-solving skills
improve — a good reason to encourage your
student to wait until
his junior or senior
year of college before
opening a credit-card
account. He’ll be
better equipped to
handle it.
Encourage your college student to take a
personal finance class
through the school’s
AMONG U.S. HIGH SCHOOL
STUDENTS WHO OWN THEIR OWN
CARS (51.4% OF SENIORS), NEARLY
HALF PAID, OR HELPED PAY, FOR
THEIR AUTO INSURANCE.
—The Jump$tart Coalition for Personal Financial Literacy
U SA A . CO M
FdUSFA09_22-25P_20-23R_Indep.USAA.indd 25
Certified Financial Board
of Standards, Inc. owns the
certification marks CFP®
and CERTIFIED FINANCIAL
PLANNER™ in the United
States, which it awards to
individuals who successfully
complete CFP Board’s initial
and ongoing certification
requirements.
SET 4
SUCCESS
Register your teen at
USAA.COM for savings and
checking accounts and prepaid cards. Then let them
know they can monitor their
accounts, with your guidance, at MY.USAA.COM.
AY
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PHOTOGRAPH BY PHOTOLIBRARY
TEACH THE
VALUE OF
INVESTING. One
business program
and to find out if the
college has a money
management services
department that offers
financial seminars,
counseling and other
help. “The key is to
help your student
access resources other
than Mom and Dad,
since that’s exactly
what he’ll need to
do as an adult,”
says Beacham. ■
THE
PASS ON ACY
USAA LEG ren to your USAA
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To add yo
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USAA (87
13
(800) 5
FA L L 2 0 0 9
USAA MAGAZINE
25
8/21/09 9:46:32 AM
ask a usaa expert
BY JOHN GILLIAM
Salvage shrinking
college savings
Since the financial crisis began, parents may have seen big
college savings losses. What should they consider doing now?
SOME PARENTS with 529 college savings plans
may not want to make contributions in 2009 due to fears
about the economy. BusinessWeek reports grim data from
investment research firm Morningstar: 529 fund offerings that
WASIF LATIF
had 80 percent or more of assets invested in equities were down an
average of 38.4 percent in the one-year period ending March 31.* No wonder
parents feel queasy about doling out more money to the funds.
Financial writer John Gilliam asked Wasif Latif, USAA’s vice president of
equity investments, about the college-funding challenge USAA members face.
GILLIAM: What do you say to those who
plan to skip making a 529 contribution
this year?
GILLIAM: But when people look at
losses of 30 to 40 percent in 2008, it’s
hard not to get discouraged.
LATIF: If you’re unemployed and can’t
pay bills, you do what you have to do.
But the percentage of members in that
situation is small. To the larger group
choosing not to contribute because of
poor 2008 returns or fears about the
economy, I say that decision may be
costly and have a detrimental effect on
their ability to fund a child’s education.
LATIF: Naturally. 2008 was a terrible
year. But in any systematic investing
program, you can’t just contribute when
the markets are up, or you give up the
benefits of the long-term approach.
Monitoring a 529’s asset allocation
so that it’s more conservative as college approaches should help protect
against dramatic losses. Our USAA 529
Plan starts off very aggressively, with a
high allocation to stocks when the child
is young, and gets more conservative
as college nears. So the biggest losses
GILLIAM: Is skipping one year really
that big of a deal?
LATIF: Yes. Successfully funding college
through a systematic investing program is based on the most tried and
true investment principles. No. 1:
Start early to take advantage of the
potential long-term performance and
diversification benefits of stocks and
bonds. No. 2: Contribute consistently
to take advantage of dollar cost averaging, which means you buy more
when markets are down, effectively
lowering your average cost. No. 3:
Make small contributions a habit, as
re-starting is tough. These principles
hold true for all types of systematic
investing, including retirement.
26
USAA MAGAZINE
FA L L 2 0 0 9
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DON’T MISS: SPECIAL 529
RULES FOR 2009
For 2009 only, the IRS is allowing 529 college
savings plan holders to switch the investment options on their existing contributions
twice instead of just once per year.
Call USAA at (800) 583-8293 for a free
portfolio review. Your investment choices
now could make a difference for your child’s
future — and your own. For more,
visit USAA.COM (search: 529).
would have been in accounts for very
young children with time on their side.
In these cases, you want to be buying
when stocks are way down. It may not
feel good now, but if market history is
any guide, it potentially will later.
GILLIAM: Has USAA made any significant changes to its 529 plan?
LATIF: We’ve added new asset classes,
including emerging markets and precious metals and minerals equities, and
we’ve increased exposure to international investments — moves which allow
us to apply more of our asset allocation
expertise. For students in college, we
currently offer a portfolio which has
only 10 percent of its assets in USAA
stock funds and the rest in USAA bond
and money market funds. But we anticipate introducing a new portfolio soon
that has a USAA money market fund as
its underlying fund so that it seeks to
preserve capital. ■
*BusinessWeek, April 30, 2009
Consider the investment objectives,
risks, charges and expenses of the USAA
College Savings Plan (Plan) carefully before
investing. Call 1-800-292-8825
to request a Plan Description and Participation Agreement containing this and other
information about the 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.
An investment in a money market fund is
not insured or guaranteed by the FDIC or
any other government agency. Although
the fund seeks to preserve the value of your
investment at $1.00 per share, it is possible
to lose money by investing in the fund.
( 800 ) 53 1 - U SA A ( 872 2 )
8/24/09 9:56:52 AM
member savings | Exclusive Products and Services for USAA MEMBERS ONLY
A checking account
that’s accountable
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If you don’t have a USAA Free Checking
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more and getting less. Compare our
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Visit usaa.com/checking
PAGE 28
Financially Fit
at an Early Age
PAGE 29
Save More on
Everyday Things with
USAA MemberShop™
PAGE 30
Life Insurance:
Because They Matter
Page 31
Retirement Planning
Made Simple
Nicole Russo
member since 2006
Nicole Russo had no idea USAA offered more
than car insurance.3 After moving her checking
account to USAA Bank, she enjoys accruing points
on her USAA Debit MasterCard®. And she raves
about USAA’s online banking services, especially
USAA Deposit@Home®.4 “It’s the easiest thing,”
says the Washington state resident, who no longer
has need for a local branch.
†USAA does not charge a fee for the first 10 ATM withdrawals and refunds up to $15 in other banks’ ATM usage fees each month. A 1% foreign transaction fee
applies to withdrawals outside the U.S.
u s a a . c o m fa l l 2 0 0 9 u s a a m a g a z i n e
FdUSFA09_27-32P_25-30R_mbrsav.indd 27
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8/21/09 12:00:03 PM
knowing more begins now
Youth Banking
Finally, something teens
will pay attention to.
Their own money.
USAA offers youth banking services that save time and money,
and teach young people the importance of money management.
After all, it’s never too early to start building confidence — and a
financial track record.
USAA Teen
Checking:5 Say
yes to “free”
and no to “fees.”
■
■
■
ree ATM use,
F
plus refunds other
banks’ ATM fees‡
The USAA
Prepaid Card
gives flexibility
and teaches
responsibility.
■
ree online and
F
mobile banking
o monthly fees,
N
no minimum
balance and free
checks
■
eloadable card
R
usable anywhere
Debit MasterCard®
is accepted
No startup or
annual fees
■
Safer than cash
■
Parental controls
Learn the joy
of saving with
a USAA First
Start Savings®
account.
■
■
■
ompetitive
C
interest rates
o monthly fees
N
or minimum
balance
pen an account
O
with as little as
$25
Go to USAA.COM (Search: youth banking)
Renters Insurance
Covering your rent doesn’t
cover your stuff.
■
We pay replacement value, not depreciated value7
■
Rates as low as $10 a month8
Go to USAA.COM (Search: renters)
USAA does not charge a fee for the first 10 ATM withdrawals and refunds up to $15 in other
banks’ ATM usage fees each month. A 1% foreign transaction fee applies to withdrawals
outside the U.S.
‡
28
u s a a m a g a z i n e fa l l 2 0 0 9 FdUSFA09_27-32P_25-30R_mbrsav.indd 28
photograph by Don Mason/Corbis
Whether you’re in college or just starting out, renters insurance6
is a must when you’re out on your own. Chances are, your stuff
is worth more than you think — from your bike to your laptop to
your flat screen. And our renters insurance offers more for less:
■ You’re covered — even if it’s your fault, if it’s an accident or if
it’s covered under your policy
( 8 0 0 ) 5 3 1 - USAA ( 8 7 2 2 )
8/14/09 8:11:52 AM
MemberShop
Get rewarded for the
things you buy every
day at MemberShopTM.
Now you can shop at name-brand retailers
at USAA’s exclusive online shopping mall
and get rewarded. Choose from over 500
retailers — from top names to specialty
brands, all in one convenient place. You’ll
get rewards for anything you buy and save
yourself a trip to the mall. The more you
shop, the more you earn.
At the USAA MemberShop,
you’ll get:
■
■
■
■
Access to select retailers
xtra rewards and special offers in
E
addition to points for those currently in
a USAA credit- or debit-rewards program
ash back for those USAA cardholders
C
not currently enrolled in a USAA rewards
program
ash back even when you use non-USAA
C
cards — just not as much as with a USAA
credit card
Want to get more for your money at
MemberShop?
Sign up for a USAA credit card with
competitive rates, no annual fee and a
choice of rewards.
Go to USAA.COM/MemberShop
U SA A . COM
u s a a . c o m fa l l 2 0 0 9 u s a a m a g a z i n e
FdUSFA09_27-32P_25-30R_mbrsav.indd 29
29
8/21/09 9:49:22 AM
knowing more begins now
Life Insurance
To ensure the future,
insure the present.
Life insurance helps secure and protect your family’s financial
future. Life insurance is one of the best safeguards against the
unexpected. Whatever your needs are, we have solutions for you.
Permanent life insurance.
Because they’re worth it.
Term life insurance fills
the gaps.
Don’t leave loved ones in a bind
due to lack of preparation. A
permanent life insurance plan
can deliver in your family’s time
of need.
When life changes, insurance
needs do as well. Use term life
insurance to fill in coverage
gaps that could leave your
family wanting.
Permanent Life
Insurance can:
Term Life Insurance can:
■
■
■
■
■
ay for your funeral, final
P
expenses and estate costs
■
■
ive you flexibility to change
G
your insurance coverage as
your life changes
upport your spouse and
S
care for dependents with
special needs
eave a legacy for family
L
members, charity, your place
of worship, alma mater or
favorite cause
ive your family protection
G
for the rest of your life at a
guaranteed cost9
■
■
■
rovide for child care and
P
education expenses
ive you the most coverage
G
for your dollar for a specific
amount of time, usually
between 5 and 30 years
eplace income to maintain
R
standard of living
ay off mortgage and other
P
debts so your loved ones can
stay in your home
omplete your planned
C
investments for your spouse’s
retirement
photograph by Rick Gomez/Corbis
Go to USAA.COM (Search: Life Insurance)
30
u s a a m a g a z i n e fa l l 2 0 0 9 FdUSFA09_27-32P_25-30R_mbrsav.indd 30
( 8 0 0 ) 5 3 1 - USAA ( 8 7 2 2 )
8/21/09 9:49:41 AM
Target Retirement Funds
Retire from retirement
planning. We’ll handle it.
Planning for retirement can feel like a second
job. Turn those hours of frustration into hours of
flexibility with a USAA Target Retirement Fund. It’s
a way to leave more time to enjoy retirement.
A USAA Target Retirement Fund:
■
■
■
■
akes saving for retirement easy — we do the
M
work for you
ives you a single-fund solution to retirement
G
planning
Offers automatic rebalancing
rovides a diversified mix of USAA equity, bond
P
funds and money markets
ives you expert portfolio management and free
G
advice from licensed advisors
photograph by Ariel Skelley/photolibrary
■
Consider the investment objectives, risks,
charges and expenses of the USAA mutual
funds carefully before investing. Contact us for a
prospectus containing this and other information about the funds from
USAA Investment Management Company, Distributor. Read it carefully
before investing.
Go to USAA.COM (Search: Target Funds)
USAA Brokerage Services
Manage your money like an expert.
With one of ours.
USAA Brokerage Services offer
you the tools and resources you
need to manage your investing
efficiently and with confidence.
Our brokerage account allows
you to shift money between bank,
brokerage and credit cards to
simplify the management process.
o to USAA.COM
G
(Search: brokerage)
USAA Brokerage Services
lets you:
■
■
■
hoose from several different
C
brokerage accounts
ain free access to research
G
from Standard & Poor’s, Argus,
MarketWatch, MarketGrader and
Market Edge
pen a new account online and
O
get 25 free trades, and trade for
as little as $5.9510
U SA A . COM
u s a a . c o m fa l l 2 0 0 9 u s a a m a g a z i n e
FdUSFA09_27-32P_25-30R_mbrsav.indd 31
31
8/21/09 9:49:56 AM
THE USAA
EDUCATIONAL
FOUNDATION®
LEGAL DISCLOSURES
Investments/Insurance: Not FDIC Insured • Not Bank Guaranteed • 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 3
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.
Page 5
iPhone is a trademark of Apple Inc.
App Store is a service mark of Apple Inc.
Page 9
The USAA Educational
Foundation, a nonprofit
organization, has the
resources to help make
your life more manageable.
Basic Investing
#503
Get MoneyWise
#504
Financing College
#513
Retirement Planning
In Your 20s And 30s
#516
Identity Theft
#520
Building And Maintaining
Good Credit
#536
Families Dealing
With Deployment
#538
Individual Retirement
Accounts (IRAs)
#561
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.
Mail Call: 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.
Pages 16-17
USAA Strategic Fund Adviser® is a service
of USAA Investment Management Company, a registered investment adviser and
broker dealer.
The risks of the Target Retirement Funds
reflect the risks of the underlying funds in
which the Funds invest. The principal
value of the Target Retirement Funds is
not guaranteed at any time, including at
the target date.
Page 21
1
Military Protection Plus is level term life
insurance. Initial life insurance coverage
limited to $350,000. Form LLT49045ST
01-05 (may vary by state). In New York,
form NLT45861NY 01-04. Military Severe
Injury Benefit and option to increase coverage to replace SGLI provided by riders.
Increases in coverage require payment of
additional premium.
Rider forms
LBR57941ST 05-06 and LBR67140ST
05-07 (may vary by state). In New York,
forms NBR60469NY 06-06 and
NBR67175NY 06-07. Availability of
increased life insurance coverage depends
on characterization of military separation.
Call for details on specific policy costs,
benefits, limitations and availability in
your state.
Page 26
Systematic investment plans do not
assure a profit or protect against loss in
declining markets. Dollar cost averaging
involves continuous investment in securities regardless of fluctuating price
levels of such securities. Investors
should consider their financial ability to
continue purchases through periods of
low price levels.
Foreign investing is subject to additional
risks, such as currency fluctuations,
market illiquidity, and political instability.
Interests in the USAA College Savings
Plan (Plan) are municipal fund securities
issued by the Nevada College Savings
Trust Fund (Trust). The value of an investment in the Plan will vary with market
conditions. The Plan is administered by
the Board of Trustees of the College Savings Plans of Nevada (Board), which is
chaired by Nevada State Treasurer. USAA
Investment Management Company provides investment management services
32
USAA MAGAZINE
FA L L 2 0 0 9
FdUSFA09_27-32P_25-30R_mbrsav.indd 32
to the Portfolios, together with its affiliate, USAA Financial Advisors, Inc, markets and provides related services with
respect to the Plan. Upromise Investments, Inc. serves as the Program Manager as well as effects participant
transactions in the Plan. Interests in the
Plan are not guaranteed by the Trust, the
Plan, the State of Nevada, the Board or
any other governmental entities, or any
USAA or Upromise entities and you could
lose money.
to gold or platinum fee schedule, depending on asset and activity levels. Offer
limited to one account per person. Valid
for U.S. citizens or permanent residents.
Void where prohibited. Offer may be
modified or terminated without notice
prior to application and is not valid with
any other offers. Other restrictions may
apply. Commissions may change without
notice. View more information and a
commission schedule.
Page 27
Figure based on potential savings with
USAA checking compared to average fee
information on 2008 bankrate.com checking study.
Use of the term “member” does not convey any legal, ownership, or eligibility
rights for property and casualty insurance
products. Ownership rights are limited to
eligible policyholders of United Services
Automobile Association. Eligibility may
change based on factors such as marital
status, rank, or military status. Contact us
to update your records. Children of USAA
members are eligible to purchase auto or
property insurance if their eligible parent
purchases USAA auto and property
insurance.
2
Obtaining insurance from USAA is
optional, not required to receive credit,
and can be acquired from other services.
3
You must qualify for USAA’s remote
deposit services; eligibility for USAA property and casualty insurance and credit
qualification required.
4
Page 28
5
Free Checking and Teen Checking are
also known as Four Star Checking.
6
Obtaining insurance from USAA is
optional, not required to receive credit,
and can be acquired from other services.
With replacement cost coverage, at our
option, subject to policy limits and policy
deductible, if you actually replace the
property we will pay you the lesser of our
cost to restore, repair or replace the damaged property or the amount you actually
spent to restore, repair or replace the
property.
7
Countrywide average price for policyholders who have $2,500 personal property coverage, $100,000 liability coverage,
and $5,000 medical payments coverage
as of February 2008. Rates vary by location and risk. Rates are subject to
change.
8
Page 30
Coverage lasts provided you continue to
pay sufficient premiums.
9
Page 31
Brokerage account holders who have
signed up to receive all investment
account confirmations and account statements online and who trade stocks 25 or
more times per quarter or who trade
stocks 16 or more times per quarter and
have $50,000 or more in eligible assets
with USAA Investments qualify for $5.95
Internet or self-service telephone trades.
Commissions are based on stock trades
executed in a rolling 90-day period. Commission rate applies up to 1,000 shares.
Eligible assets include those held in USAA
Private Investment Management, USAA
Strategic Fund Adviser and USAA College
Savings Plan (529) accounts and USAA
mutual funds; non-USAA managed assets
held in USAA brokerage or Asset Management Accounts (AMA) are not included in
calculation of eligible assets. Other
restrictions may apply. Commissions are
subject to change without prior notice.
View more information and a commission
schedule.
10
Free trade offer expires December 31,
2009. Offer not eligible for transaction
fee mutual funds. Free trades limited to
domestic, NYSE, AMEX or NASDAQ-listed
securities, up to 1000 shares placed on
the Internet or self-service telephone
system. After 25 free trades or 60 days,
whichever comes first, account will revert
Member
Eligibility restrictions apply to purchase of
property and casualty insurance. To be
eligible for auto and property insurance,
separated military personnel must have
been separated on or after 1/1/1996 with
a discharge type of “Honorable.” Once
eligibility is established, it is generally
ongoing. Eligibility may change based on
factors such as marital status, rank, or
military status. Customers must be in
good standing and meet underwriting
guidelines. Rates and benefits may vary
due to eligibility.
USAA Companies
USAA means United Services Automobile
Association and its affiliates. Property and
casualty insurance provided by United Services Automobile Association, USAA Casualty Insurance Company, USAA General
Indemnity Company, Garrison Property and
Casualty Insurance Company, USAA County
Mutual Insurance Company, USAA Texas
Lloyds Company, San Antonio, TX, and
USAA, Ltd. (Europe), and is available only
to military members and their families who
meet certain membership eligibility criteria. Each company has sole financial
responsibility for its own products. Coverage descriptions are brief and subject to
the terms and conditions of your policy.
Read your policy for details. Applications
subject to underwriting. To find out if you
are eligible, contact USAA. Underwriting
restrictions apply. Investments provided by
USAA Investment Management Company
and USAA Financial Advisors, Inc., both
registered broker dealers. Trust Services
offered by USAA Federal Savings Bank.
Banks Member FDIC. Life insurance and
annuities offered 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. 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.
Credit cards provided by USAA Savings
Bank, other bank products provided by
USAA Federal Savings Bank, both Member
FDIC. Merchandise and Alliance services
provided through USAA Alliance Services,
L.L.C. USAA Wealth Management is a service of USAA. © 2009 USAA.
92262
( 800 ) 53 1 - U SA A ( 872 2 )
8/24/09 9:57:53 AM
10.125 in.
7.75 in.
DON’T LET RETIREMENT
PLANNING BECOME
YOUR SECOND JOB.
TRY USAA.
Better planning begins now | 800-235-0481 | usaa.com
In these economic times, evaluating your retirement strategy is not only appropriate,
it’s smart. Fortunately, you have an ally in us. We offer a comprehensive suite of
retirement solutions from professionally managed portfolios to guaranteed annuities.
If value and great customer service are important to your retirement planning, then
it’s time you talked with us about our integrated investing and life insurance solutions.
USAA means United Services Automobile Association and its affiliates. Purchase of a non property and casualty insurance product does not establish eligibility for or membership in
USAA property and insurance companies. Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers. 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 advisor and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. An annuity is an insurance contract sold by an
insurance company designed to provide an income usually after retirement that cannot be outlived. The fixed annuity guarantee is against principal loss and depends on the claimspaying ability of the issuer. 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. © 2009 USAA. 92101-0709
FdUSFA09_33P_31R_C3 ad.indd 1
8/14/09 8:22:10 AM
quotable
The Academy taught
me the importance of paying
attention to details, and I
learned the value of listening.
Whether you’re a naval
officer or a business owner,
whether you’re talking to a
guy off the streets or a CEO,
you have to truly hear what
people are saying.
PHOTOGRAPH BY JEFF NEWTON PHOTOGRAPHY
Troy McSwain II
USAA member since 1981
Learn more about this former
U.S. Naval Academy football
player, now a fashion designer
to celebrities, on page 11.
60115-0809
FdUSFA09_34P_MembSnap.indd 34
8/21/09 9:54:48 AM