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4 Things Parents Should Know Before Paying for College

college_campus

Financial Specialist Shares Ways to Help Your Child
 While Protecting Your Retirement

From $20,000 to $65,000 a year – that’s the tuition cost for one year of college, says John McDonough, a money expert who helps retirees and parents plan for their families’ futures.

“For the 2012–2013 academic year, the average cost for an in-state public college is $22,261. A moderate budget for a private college averaged $43,289,” says McDonough, CEO of Studemont Group College Funding Solutions, www.studemontgroup.com. “But for elite schools, we’re talking about three times the cost of your local state school. Either way, your kid’s higher education can easily shoot into six figures after four years.”

Along with worrying about rising tuition prices, parents also fear for their own futures if their retirement savings are drained by children’s college costs, McDonough says. Only 14 percent, for example, are very confident they’ll have the money to live comfortably in retirement, he says, citing a 2012 survey by the Employee Benefit Research Institute.

“Families feel they’re faced with conflicting goals, but there are numerous ways to pay for college while investing in your future retirement,” says McDonough, who offers insights for parents to keep in mind while planning for their child’s education:

• The ROI of a college education: At a time when so many American families are financially strapped, college is an especially stressful topic because parents know higher learning will help their kids succeed. College graduates earn 84 percent than those with only a high school diploma, according to Georgetown’s Center on Education and the Workforce. Here is how earning breaks down over one’s life time, based on education: a doctoral degree-holder will earn $3.3 million over a lifetime; $2.3 million is estimated for a college graduate; those with only a high school diploma can expect $1.3 million.

• Move retirement assets to qualify for grants: Most parents know about the 529 savings account, but that’s not necessarily the best or only option. Reallocating your retirement assets, such as 401(k)s, can better position a child to qualify for grants and scholarships. This legal and ethical maneuvering may be the single most important factor when considering how to pay for college.

• Know your student’s strengths and weaknesses: Consider independent and objective analysis of your future college student. Assessment might include a personality profile and a detailed search for a future career. Also think about a more nuts-and-bolts approach, including scholarship eligibility, SAT and ACT prep courses, review of admissions essays and an in-depth analysis of chances for enrollment in a student’s top four choices of colleges.

• Make a checklist of financial aid forms: In order to maximize a fair price of higher education, remember there is plenty of data to review. McDonough recommends a checklist with a timeline and notable deadlines. Be ready to troubleshoot the “alphabet soup” of data forms: FAFSA – Free Application For Federal Student Aid; CSS profileCollege Scholarship Service; SAR – Student Aid Report; and more. Think about this process as a second job, or find professional help you can trust.

About John McDonough

John McDonough is the managing member at Studemont Group, which is primarily focused on helping retirees gain peace of mind with unique market rescue and recovery programs. He is also founder, president and CEO of Studemont Group College Funding Solutions. His experience in the financial services industry includes managing partner at Granite Harbor Advisors in Houston and divisional vice president of AXA Equitable/AXA Advisors, the third largest insurance company in the world. McDonough is a member of the prestigious Forum 400, a qualifier at the Court of the Table qualifier for Million Dollar Round Table, an active member in National Association of Insurance and Financial Advisors and Society of Financial Service Professionals, as well as American Association of Life Underwriters. He has completed the course work to sit for the Certified Financial Planner® professional designation exam from Rice University.

 

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How the Recession Has Changed Retirement Planning

Baby_Boomers_Redefine_Retirement
Expert Offers 3 Tips for Baby Boomers

The economy may be recovering, but some of the changes wrought by the Great Recession may be long-lasting. Anyone planning for retirement, no matter what their age, needs to take those changes into account, says financial advisor Philip Rousseaux, a member of the esteemed Million Dollar Round Table association’s exclusive Top of the Table forum for the world’s most successful financial services professionals.

“People in their 40s and younger have some time to retooltheir plan, but Baby Boomers need to think with more urgency,” says Rousseaux, founder and president of Everest Wealth Management, Inc., www.everestwm.com.

“A lot of boomers had all of their retirement investments in the stock market and, if they didn’t lose their principal, it will take some time for them to recoup their gains. Others moved their money to short-term savings, like CDs. But with interest rates so low, they’re actually losing money when you factor in inflation.”

Those are the two most common mistakes people make in retirement planning – having everything in either stocks or short-term savings is a bad idea, he says.

“Space your investments so they’ll come due as they’re needed,” Rousseaux says. “Plan some that can be available in the short term, for emergencies, and others that will be available as you age.”

Only 14 percent of Americans are very confident they’ll have the money to live comfortably in retirement, according to a 2012 survey by the Employee Benefit Research Institute.

Here are Rousseaux’s suggestions for ensuring you’re part of that 14 percent.

• Don’t take risks you can’t afford. This is another common mistake. “Don’t put the bulk of your assets into anything that makes your principal vulnerable. Gambling that you’re going to win big on the market, or any other investment, means you also risk losing big.” A portion of your investment should have a guaranteed return.

• Seek any guidance from independent financial advisors. This has two benefits: Advisors who aren’t marketing their own products have no conflicts of interest. “You wouldn’t go to a commissioned salesman for advice on buying a high-tech product. Instead, you’d probably turn to a trusted friend or an independent expert source, like Consumer Reports. Take the same care with something as important as your retirement.” The second benefit is that independent advisors can devise creative, innovative solutions to meet the needs of individual clients. Those working for companies like MetLife are not free to think outside the box. And that’s especially important In this new, post-recession economy.

• Consider alternatives to the stock market. One of the effects of the recession is that the public realizes Wall Street is not a safe retirement plan. Even if it can get you there, it’s not necessarily going to keep you there.“There are a number of great, safer alternatives,” Rousseaux says. One of those is fixed, indexed annuities. “You loan an insurance company money and it guarantees you payments over a specified length of time. It’s a contract between you and the company,” he explains. Fixed-rate indexed annuities have a minimum and maximum interest payment that’s linked to a common index, such as the Dow. When the Dow goes up or down, so does the interest rate, but it never go below the guaranteed minimum or above the guaranteed maximum. “Your principal is safe and you can ride an up market without the risk,” he says.

With pension plans a luxury of the past and Social Security not a guarantee for the future, Rousseaux says whatever your age, it’s important to start planning now for retirement by creating your own private pension.

“The good news is, our life expectancy grows every year,” he notes. “It’s up to you to ensure that you have a great quality of life when you decide you no longer want to work.”

About Philip Rousseaux

Philip Rousseaux is the founder and president of Everest Wealth Management and Everest Investment Advisors money management firm. A staunch advocate of objectivity in investment advice, he’s a member of the Million Dollar Round Table, the international association of independent advisors whose members are held to a rigid code of ethics. He is the co-author of “Climbing the Mountain to Financial Success.” Philip received his bachelor’s in economics from Towson University and completed the Wharton School of Business’s Investment Strategies and Portfolio Management Executive Education Program

 

 

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How the Recession Has Changed Retirement Planning

images (2)Expert Offers 3 Tips for Baby Boomers

The economy may be recovering, but some of the changes wrought by the Great Recession may be long-lasting. Anyone planning for retirement, no matter what their age, needs to take those changes into account, says financial advisor Philip Rousseaux, a member of the esteemed Million Dollar Round Table association’s exclusive Top of the Table forum for the world’s most successful financial services professionals.

“People in their 40s and younger have some time to retooltheir plan, but Baby Boomers need to think with more urgency,” says Rousseaux, founder and president of Everest Wealth Management, Inc., www.everestwm.com.

“A lot of boomers had all of their retirement investments in the stock market and, if they didn’t lose their principal, it will take some time for them to recoup their gains. Others moved their money to short-term savings, like CDs. But with interest rates so low, they’re actually losing money when you factor in inflation.”

Those are the two most common mistakes people make in retirement planning – having everything in either stocks or short-term savings is a bad idea, he says.

“Space your investments so they’ll come due as they’re needed,” Rousseaux says. “Plan some that can be available in the short term, for emergencies, and others that will be available as you age.”

Only 14 percent of Americans are very confident they’ll have the money to live comfortably in retirement, according to a 2012 survey by the Employee Benefit Research Institute.

Here are Rousseaux’s suggestions for ensuring you’re part of that 14 percent.

• Don’t take risks you can’t afford. This is another common mistake. “Don’t put the bulk of your assets into anything that makes your principal vulnerable. Gambling that you’re going to win big on the market, or any other investment, means you also risk losing big.” A portion of your investment should have a guaranteed return.

• Seek any guidance from independent financial advisors. This has two benefits: Advisors who aren’t marketing their own products have no conflicts of interest. “You wouldn’t go to a commissioned salesman for advice on buying a high-tech product. Instead, you’d probably turn to a trusted friend or an independent expert source, like Consumer Reports. Take the same care with something as important as your retirement.” The second benefit is that independent advisors can devise creative, innovative solutions to meet the needs of individual clients. Those working for companies like MetLife are not free to think outside the box. And that’s especially important In this new, post-recession economy.

• Consider alternatives to the stock market. One of the effects of the recession is that the public realizes Wall Street is not a safe retirement plan. Even if it can get you there, it’s not necessarily going to keep you there.“There are a number of great, safer alternatives,” Rousseaux says. One of those is fixed, indexed annuities. “You loan an insurance company money and it guarantees you payments over a specified length of time. It’s a contract between you and the company,” he explains. Fixed-rate indexed annuities have a minimum and maximum interest payment that’s linked to a common index, such as the Dow. When the Dow goes up or down, so does the interest rate, but it never go below the guaranteed minimum or above the guaranteed maximum. “Your principal is safe and you can ride an up market without the risk,” he says.

With pension plans a luxury of the past and Social Security not a guarantee for the future, Rousseaux says whatever your age, it’s important to start planning now for retirement by creating your own private pension.

“The good news is, our life expectancy grows every year,” he notes. “It’s up to you to ensure that you have a great quality of life when you decide you no longer want to work.”

About Philip Rousseaux

Philip Rousseaux is the founder and president of Everest Wealth Management and Everest Investment Advisors money management firm. A staunch advocate of objectivity in investment advice, he’s a member of the Million Dollar Round Table, the international association of independent advisors whose members are held to a rigid code of ethics. He is the co-author of “Climbing the Mountain to Financial Success.” Philip received his bachelor’s in economics from Towson University and completed the Wharton School of Business’s Investment Strategies and Portfolio Management Executive Education Program.

 

 

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