August 18, 2014
$24,000 every year that's what one, state-supported university publishes as the cost to attend for residents. Out-of-state students add another $27,000 to make it $51,000 every year.
How do you manage to pay for that? Heard of the 529 Plan? It takes its name from the section of the IRS Code that stipulates its requirements and advantages. Not a bad plan, in that you deposit money from your take-home-pay (yes after you've had your taxes withheld) into an account that, from then on, will grow without tax obligations IF . . .
That is a big IF.
If you do not need it for something else urgent and expensive.
If those education costs line up with the approved list of expenses.
If your children attend college and spend all of the 529 account.
If your plan does well in the stock market.
If, when you need the money, the market isn't having a major correction.
If you do not mind paying a hefty penalty plus the tax owed if an if happens.
Let's just say, for the sake of conversation, you dodge all of that. There is still the small matter of once you spend the money for approved college expenses, that's it. All gone. Account balance zero.
You managed to save $100,000 for each child. Each child now has a college diploma and is looking for work, getting married, sprouting your grandchildren, trying to buy a house and all of those hundreds of thousands of dollars you had scrimped and sacrificed to save poof! -- are gone.
What if, instead of filling up that college savings tank full of money, and then draining it dry, you could have collateralized those funds?
What if your children, who earned the diploma, helped pay that all back as part of their future retirement?
In other words, what if your hundreds of thousands of dollars could have kept compounding interest while you used them as collateral to pay the expenses of a college education?
April 16, 2014
The link will take you to a splash of cold reality. And I'm not picking on the current President and Congress. Since the 16th Amendment to the U.S. Constitution was ratified in 1913 tax increases have been a way of life for "we the people."
Tax-deferred accounts not only postpone the tax due, but also the tax calculation -- and you will have no say-so in what that calculation is.
Is your retirement leaning on tax-deferred (that is to say, postponed) accounts?
I am available to discuss with you facts that may change your life in retirement.
January 30, 2014
It's the time of year to complete FAFSA! (FREE Application for Federal Student Aid) We have included a few guidelines to keep in mind:
1. The FAFSA must be completed every year. If you are already a student in college don't forget to complete the form for the upcoming year.
2. You don't have to wait until you file your taxes to complete FAFSA. It is wise to complete FAFSA as early as possible as financial awards are often given on a first come first serve basis. Use last year's tax return to complete the form. You can always make corrections at a later date if needed.
3. Every student preparing for college should complete the FAFSA regardless of their family's income level. Don't make the mistake of thinking your family's income level is too high. Financial aid can be awarded based on many different factors including number of children in college. Also, in many cases colleges will not give merit based awards unless the student has completed the FAFSA.
4. Perhaps one of the most important things to remember is the FAFSA is always free to complete. If you find yourself at a website asking for money in order to complete the form then you are not at the official FAFSA website.
Completing the FAFSA is an important step in your journey to college. Having problems completing FAFSA? Are you still not sure where to begin? We offer a one-on-one consulting session at no cost to you. Contact us today.
Hannah, Director of Student Services
August 8, 2014
Beware of Loan Programs with Fine Print
A recent email arriving in my inbox was from a major credit card company offering money for college expenses. Forgive me for stating the obvious but, be careful!.
That link recounts just one of the snares awaiting families who fail to exercise the utmost caution when dealing with the very emotional issue of sending a child to college.
We offer a helpful (dare I say vital?) & objective perspective. We are good at "finding money." Call us. read more
August 4, 2014
Are colleges curbing costs?
The North Carolina legislature recently approved the UNC System Board's decision to hold tuition increases to five per cent (5%). The legislature also imposed a maximum of fifteen per cent (15%) aggregate financial aid from total tuition revenues. What does that mean for students and their parents?
First, the 5% cap is on tuition. At UNC campuses tuition is generally only about one quarter to one third of the cost of attendance. I have not read that there is a similar cap on the other charges room and board, and various fees that every student pays.
Furthermore, how much is your family's income growing annually? Is it by as much as 5% every year? It looks like NC public school teachers will receive something around a 7% salary increase. How long ago was their last increase in pay? How much longer will they wait for the next one? In the meantime their children face annual cost increases to attend college.
I cite teachers because, in my mind, they are representative of America's middle class -- hard-working; limited options to increase their earned income; many single mothers; struggling desperately to balance the family budget with sharp increases in food, utilities and gasoline.
Second, financial aid has been capped at 15% of revenue. For most of the system campuses that means approximately $1,100 - $1,200 per full-pay student per year. It is important to understand what those numbers mean. For every student paying full tuition the school has about eleven to twelve hundred dollars to offer other students in "scholarships."
Such financial aid is not necessarily need-based. Schools use their discretionary dollars to entice students they want enrolled. Therefore, a student with strong academics, coming from a six-figure-income family is as likely to be offered that thousand dollar grant as is a similarly strong student from a family with income of under $70,000.
Another fact is that a school's own, limited grant-in-aid money is in addition to other financial aid possibilities (e.g. ..... read more
July 15, 2014
It is true that we live in a caveat emptor world. That means, "Buyer - beware!" I always advise my clients to understand thoroughly my process and recommendations. At any point along the way, your questions are relevant and of great importance; always ask your question. In addition to that, I strive to raise your level of confidence in me to a point where you can sleep at night after following my process and advice.
As part of that I am required to complete 24 hours of Continuing Education (minimum) bi-annually. (In fact, I am working on that this month; which is what prompted me to write this.) Above and beyond that I participate in weekly training, review and education; plus I attend conferences for multi-day training and education at least 4 times per year, every year.
It does not make me perfect. It does, hopefully, lend credibility and trustworthiness to my processes and services in your eyes -- the only ones, in the final analysis, that matter. read more
July 7, 2014
What drives our passion?
It breaks our hearts to see kids dreams crushed; and fills us with joy and a sense of true accomplishment to help see those dreams become reality.
Sunday I met Paige, age 20, who told me why her dream was impossible. "Who," I asked, "told you that?" Her answer was "lots of people." She described a few -- friends, school counselors, teachers; but named no one in particular.
As I drew her out in conversation she expressed a well-defined vision of the future she wants. She apparently has the personal and academic credentials to merit a chance to succeed. I told her so. I asked her, "If you could have your dream for about the same cost as what you are told you must settle for, which would you choose?"
Well the answer was obvious -- and the answer is possible! I pray that young Paige will reach out to me and let me help her. read more
July 4, 2014
Celebrating 238 years as an independent, free nation, and at least 500 years of God's providence and grace over this piece of planet Earth, I awoke this morning with my mind in turmoil about where we, as a nation, are headed. Then I stopped to pray.
My moments alone with God changed my entire outlook. Here are my thoughts:
In 2008 President Obama declared his intention to "fundamentally transform" USA. Since 2008 he has successfully made America's public life more socialist
more culturally disparate
more racially fragmented
more a nation of political brute-force
less guided by the rule of law
less of a superpower
less secure at the borders . . .
And that is where the Lord broke through to show me something. I was reading about my sister-in-Christ Nicole Rim. She is of Cambodian extraction and serves Christ among the third largest population of Cambodians in the world in Lynn, MA.
Nicole wrote, "Because Buddhism is so deeply ingrained in the Cambodian culture . . . it's not just rituals. It's actually their worldview. . . . To be Cambodian is to be Buddhist."
The Lord took my thoughts to the hundreds of thousands of people the Obama administration is pulling across the border. Who are they, and what is their worldview?
They are predominantly native Americans, steeped in 500 years of Roman Catholicism. To be Latin American is to be Roman Catholic.
What does that mean for President Obama's ultimate goal to fundamentally transform the USA?
They consider the Pope's authority greater than his authority
They are Pro-Life/anti-abortion
They know of only one type of marriage: one man to one woman
They believe in traditional family life more than in a political nation-state
They believe in individual property rights
They believe that "might is right"
They believe in orthodox Christian morality.
In short, their worldview is fundamentally different from that of the current administration and more compatible with my own, Anglo-Saxon Protestant worldview.
So, Happy 4th ..... read more