Where can you put the money will not hurt your EFC for college, annuity or CD, or something else.?
I have money in a life insurance death benefits. politics (my husband died May 2006) I put in a retirement fund (annuity, CD), but still want be able to reach it if necessary. I have a son in college now (the school was paid last year of the grant money), the other will attend in the fall 2007. If possible I will not touch that money, but have no idea where to invest, so I'm not so penalized for having this money. Since I have a low income I wanted put that money into a vehicle for retirement and not spend it all in college. I hope someone can suggest something.
If you give some money to their children that can open an education savings plans, such as Coverdell or 529. 529 come in two varieties, the investment fund accounts or prepaid tuition. Because it is near college, I would recommend the second, if you think that students will enter on the state and the plan is financially sound (so no SC, TX or other). Currently Federal authorities do not count as assets of a dependent student for as long as the student is the owner, not you as the owner and the student as beneficiary. (Bonus extra: any increase in the account is not taxable.) The reason they say now is that appears to be a legal vacuum that may end up saying that there is an advantage, but when a student has the money is tax-free income to be reported on the FAFSA. If that's the case, the money will really make children ineligible. Or closure may be that even if the student is the owner counts as main asset. There has been some talk in Congress about making education savings excluded from a good financial aid. Also, if you put him in a retirement account (IRA, Roth IRA), then not be counted as an asset for financial aid. But can out of the retirement account until 59 1 / 2 years of age, with few exceptions. Furthermore, since the federal calculation does not take into account equity of origin could be advantageous to pay your mortgage. You will not be able to get the money, but without the payment of the house, he would have extra cash flow each month. This would not work at Harvard Rich private schools because they use different information to the federal formula, but that would apply to most state schools and federal grants. It is likely that other people say that a number of things, like giving a relative to "hold", or not say when present, but most of these range from ethics to illegal fishing. If it stays where you can get to it, must count as an asset. Fortunately, as parents, are only expected to contribute over 7% of asset to education. But if the insurance is like the two I saw last fall semester, 7% is not enough. In addition, the federal calculation does not take into account a principle amount that increases with age. For example, currently 45, single mother is not expected to contribute assets below $ 17,500. So you can keep 3-6 months of emergency fund, the financial advisor recommended size, and put the rest into a real retirement account. Unfortunately, due to limits the things I said earlier (for example, most of the IRA can be configured in one year is $ 4,000 in most cases) will probably not be able to use completely even property left by her late husband. The reason people buy life insurance is to maintain a lifestyle similar to what they had before the person who died. So do not be surpised if it ends with all the financial support of what it would be if her husband had lived. If you live in South Carolina, that children could apply for the Fellowship Byrnes (http://www.byrnesscholars.org/) and probably no one like him around the country.
Say “NO” To Risk
Related posts:
Comments on this entry are closed.