Exploring Home Equity Options: Smart Strategies for First Horizon Employees to Navigate Financial Choices

For First Horizon employees comparing the advantages and disadvantages of HELOCs and personal asset loans, it is important to consider the future planned financial decisions and individual risk,' suggests Michael Corgiat from The Retirement Group, a division of Wealth Enhancement Group.

When applying for home equity or personal asset loans, the First Horizon employees should assess not only the financial return but also the consequences for their investment strategy,' says Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article we will discuss:

1. Comparing Loan Types: This paper compares Home Equity Lines of Credit (HELOCs) and personal asset loans for First Horizon employees in terms of interest rates, repayment schedules, and associated risks.

2. Financial Strategies for Borrowing: This article explores how to use investment portfolios to secure loans and how this approach can be safer than a conventional HELOC.

3. Tax Implications and Retirement Planning: In this article, the effects of different strategies on tax treatment and retirement planning are described with reference to a study by the National Bureau of Economic Research.

If First Horizon employees are planning to take loans against their home equity in the present financial situation, the decision-making can be rather challenging, especially between a HELOC and a personal asset loan that is backed by securities. Knowing the market trends and the advantages of the options can aid in a correct choice.

HELOCs: Current Rates and Terms A HELOC is a type of loan which enables the homeowner to borrow against the home equity through a line of credit, much like a credit card. The interest rates on HELOCs, which are usually linked to the prime rate set by the Federal Reserve and which have been on the rise lately, start from 8.64% to 10.72%. Although these rates are usually lower than those of other loans, their variable nature is risky.

Additionally, HELOCs are accompanied by high annual fees and closing costs that increase the cost of borrowing significantly. Personal Asset Loans: A Viable Alternative Instead, personal asset loans use your investment portfolio as collateral and have an average interest rate of around 6%, lower than the current HELOC rates.

This type of loan enables you to withdraw the funds without having to dissolve your home equity and instead use your investments as collateral. Advantages of Personal Asset Loans Lower Interest Rates: Such loans are known to have lower interest rates than HELOCs, which could amount to a lot of money over the life of the loan.

Stable Repayment Terms: While HELOCs are not available in fixed-rate terms, personal asset loans can provide them and thus enable the borrower to know exactly how much they owe and when they will be paying it back, especially during periods of rate volatility.

Reduce Home Risk: Taking a personal asset loan prevents the risk to your home. If the client defaults on the loan, the consequences may include loss of some investments rather than foreclosure of the home.

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Flexible Cash Usage: Both loan types can be used for a number of purposes for the funds received. However, personal asset loans do not have the long drawn-out appraisal and approval process that is associated with HELOCs and thus provides for easier access to the funds.

Conclusion:

Therefore, in the light of the present economic conditions and the higher rates of HELOCs, personal asset loans that are backed by securities are a good alternative. They also provide the advantages of lower risk to your home, more consistent repayment terms, and lower interest rates. It is always advisable to seek the counsel of a financial advisor to come up with a plan that is most suitable for your situation.

Tax Implications at Retirement When retiring from First Horizon, you should know how the various borrowing strategies can affect your taxes. According to a study by the National Bureau of Economic Research, personal asset loans may have more favorable tax consequences than HELOCs, especially when the stocks that are appreciated are used as collateral. Thus, for retirees, it will be possible to defer the payment of capital gains taxes and, therefore, keep more money for retirement (National Bureau of Economic Research, April 2024).

For First Horizon employees, it is important to know the differences between the two options of borrowing – from home equity or from investment portfolio. Make informed decisions to protect your financial future and retirement comfort.

Sources:

1. 'Will HELOC Rates Decrease in 2025?' LendEDU, 2024, www.lendedu.com . As for the HELOC rates, this source explores how they are linked to the economic indicators and Federal Reserve actions that will affect retirees in the future.

2. 'HELOC Rates 2025: Today's Home Equity Line of Credit Rates.' The Mortgage Reports, 2024, www.themortgagereports.com . It also compares HELOCs with other financial products and assists retirees in the right decision of borrowing.

3. 'HELOCs: What They Are and How Retirees Can Benefit from Them.' Investopedia, 2024, www.investopedia.com . The article describes the functions of a HELOC and how it is useful for retirees in terms of cash flow and asset management.

4. 'Home Equity Lines of Credit: Guidance for Retirees.' NerdWallet, 2024, www.nerdwallet.com . It provides a guide on how to handle HELOCs in retirement, with regard to interest rates and financial leverage.

5. 'Home Equity Lines of Credit in Retirement Planning.' Forbes, 2024, www.forbes.com . This article explores how HELOCs are included in retirement planning, including the taxes and estates for the retirees.

What type of retirement savings plan does First Horizon offer to its employees?

First Horizon offers a 401(k) retirement savings plan to help employees save for their future.

Does First Horizon provide matching contributions to the 401(k) plan?

Yes, First Horizon provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

What is the eligibility requirement to participate in First Horizon's 401(k) plan?

Employees at First Horizon are eligible to participate in the 401(k) plan after completing a specific period of service, typically within the first year of employment.

How can employees at First Horizon enroll in the 401(k) plan?

Employees can enroll in First Horizon's 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

What investment options are available in First Horizon's 401(k) plan?

First Horizon offers a variety of investment options in its 401(k) plan, including mutual funds, target-date funds, and other investment vehicles.

Can employees at First Horizon take loans against their 401(k) balance?

Yes, First Horizon allows employees to take loans against their 401(k) balance under certain conditions, as outlined in the plan documents.

What is the vesting schedule for First Horizon's 401(k) matching contributions?

The vesting schedule for First Horizon's matching contributions typically follows a graded schedule, which means employees earn ownership of the match over a period of time.

Are there any fees associated with First Horizon's 401(k) plan?

Yes, there may be administrative fees associated with First Horizon's 401(k) plan, which are disclosed in the plan documents.

How often can employees at First Horizon change their 401(k) contribution amount?

Employees at First Horizon can change their 401(k) contribution amount at any time, subject to the plan's guidelines.

What is the maximum contribution limit for First Horizon's 401(k) plan?

The maximum contribution limit for First Horizon's 401(k) plan is set by the IRS and may change annually; employees should refer to the latest IRS guidelines for specifics.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

First Horizon National Corporation offers both a pension plan and a 401(k) plan to its employees. The First Horizon National Corporation Pension Plan is a defined benefit corporate pension fund that was established in 1946. This pension plan provides retirement, death, and disability benefits to eligible employees and their beneficiaries. The assets of the pension plan are managed by the Pension, Savings, and Flexible Compensation Committee, with First Tennessee Bank National Association serving as the trustee (PitchBook). In addition to the pension plan, First Horizon provides a 401(k) plan where employees can save for retirement with contributions matched by the company up to 6% of their pre-tax income. The 401(k) plan also includes various savings and money management tools, such as Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA), which allow employees to set aside pre-tax income for healthcare and dependent care expenses

Restructuring and Layoffs: In early 2024, First Horizon announced a significant restructuring plan aimed at streamlining operations and reducing costs. The bank plans to cut approximately 5% of its workforce over the next year as part of this initiative. This move is in response to increasing operational expenses and the need to enhance efficiency in a challenging economic environment. This news is particularly relevant as it reflects broader trends in the banking sector where institutions are adjusting their workforces to remain competitive amidst economic uncertainty.

First Horizon Corporation (FHN) provides a comprehensive employee stock option and Restricted Stock Unit (RSU) program aimed at retaining top talent and incentivizing long-term performance. First Horizon offers both stock options and RSUs to eligible employees, primarily those in executive or senior management roles. These awards generally vest over a period of three to five years, with specific performance metrics tied to company performance and stock price. Employees who meet certain job levels and performance criteria are eligible to participate in these equity compensation plans. In 2022, First Horizon offered RSUs that vest annually, providing employees with ownership stakes in the company. By 2023 and 2024, the bank continued this program with slight adjustments, including expanded eligibility and adjusted performance criteria (

First Horizon Health Benefits Overview Company Website: The official First Horizon website provides the most direct and accurate information. Glassdoor: This site often has employee reviews and details about health benefits, including recent changes or feedback from employees. Indeed: Similar to Glassdoor, Indeed might have employee reviews and specific information about health benefits and any recent updates. LinkedIn: Sometimes companies post updates about employee benefits or changes in health-related policies here. Benefits.gov: This site provides general information about employee benefits and might have relevant details or changes affecting First Horizon.