Financial Aid For College Students
Even if you have not been able to save all the money you will need for college, several alternatives exist to assist you in making up the difference.
Financial aid comes in many shapes and sizes -- from scholarships and grants which do not need to be repaid, to federal loans which carry very favorable interest rates and terms. The following are a few of the most popular sources of financial assistance:
Section 529 College Savings Plans
A 529 plan is a state-sponsored education savings program that allows an individual to save in a tax-deferred account to pay for a beneficiary's post-secondary education at any accredited school in the United States. Unlike Coverdell Education Savings Accounts, which excludes joint filers with adjusted gross incomes (AGIs) above $220,000 and single filers with AGIs above $110,000, there are no income restrictions on those contributing to the plan.
The Increasing Cost Of Education
A college education is an investment that pays off. According to The College Board's annual report, Trends in College Pricing, median annual income for bachelor's degree recipients is 80 percent higher than median income for those with only a high school diploma. Over a lifetime that difference exceeds $1,000,000.
What Is A Qualified Annuity
Many employers allow their employees to contribute to an annuity program. This becomes an investment option in a salary reduction retirement plan. Under this plan your current taxable salary is reduced and in addition it accumulates tax-deferred earnings. Some companies have added annuities to their retirement list. If you work for a non-profit organization you'll probably be able to choose either a fixed or variable annuity or both. If you have a small business, or work for yourself, you can invest in a qualified annuity by setting up a Simplified Employee Pension (SEP) or a Keogh. Many financial plans are available that you can adopt or you can use a specialist to create a plan for you.
Life After Debt
If you find yourself in trouble financially, there are usually no easy answers -- but there are many ways out for those willing to commit to changing their financial habits.
Your ability to pay your bills can be affected by situations beyond your control such as serious illness, divorce or the sudden loss of a job. Poor financial management can also threaten your economic security. You may be able to juggle your creditors for a time, but eventually you may come to realize you need help in resolving your financial problems.
Determining Your Life Insurance Coverage Needs
Like auto insurance coverage, it is sometimes difficult to see the true value of life insurance coverage until you actually need it. In the meantime, the only way you will feel comfortable with your life insurance policy is if you understand, and agree with, the reasons you bought it in the first place.
There are many reasons for an individual to own life insurance coverage. Perhaps the most compelling reason is to purchase a death benefit which will provide for the financial needs of their survivors.
Keeping Your Plan In Balance
No matter what type of investor you are, it is important to keep your plan on track. Revisit your asset allocation periodically (every year or two, depending on market conditions) and see whether it needs adjustment. You should also periodically re-examine your risk tolerance and investment profile, especially as you get closer to your goal. You may discover you need to tweak your portfolio’s risk exposure over time.
Living Expenses In Retirement
In order to plan realistically for the future you need to have a clear understanding of what money you need when you retire. This will include the cost of living and special activities you will have. It is estimated that you will need to replace 60% to 80% of your pre-retirement earnings in order to keep the standard of living you have had thus far.
