Funding Education / Retirement Without Going Broke By Shirley White-Stevens

1. Funding Education / Retirement Without Going Broke By Shirley White-Stevens

2. The Education Dilemma? Fund Education . . . Without Changing Your Lifestyle Or Robbing Retirement

3. College is Expensive! • Avg. Public University …………. $15,000 • Avg. Private College ……………… $30,000 • Elite Private College …………….. $45,000

4. Paying for College with After-Tax Money

5. Dollars Spent for College Equals: Less Money for Retirement

6. Tax $$ Spent Equals Retirement $$ Lost • $$ sent to the IRS is $$ you CANNOT put into retirement. • US Dept. of Commerce: “Avg family SPENDS 1/3 of annual income on taxes.”

7. The Retirement Dilemma • YOUR age when your last child graduates? • Fund your retirement AFTER paying for college?

8. The Education Funding Problem College Retirement How Can I FundBOTH?

9. The Answer is Work SDRAWKCAB! • Fund Retirement FIRST! • You Can’t . . . • Borrow for Retirement • Use your Child’s Income • Use Scholarships for Retirement

10. What Are Your Retirement Options? • Increase Income (cash flow) • Reduce Expenses (debt) • ReduceTaxes

11. More Options . . . • Increase Monthly 401(k) Contribution • Increase Rate of Return • Work Past Age 65 • All the Above

12. Make College Funding/Retirement Non-Issue: • Increase Cash Flow • Education Tax Strategies • New Tax Benefit = Tax Scholarship • Higher Tax Bracket = Greater Benefit • Increase Eligibility for Aid

13. Money Preference? Yours? Theirs? • Savings • Gifts • Current Income • Financial Aid • Borrow • Children’s Resources • Education Tax Strategies

14. Gifts From Relatives • Loss or Possible Loss of Aid: - Custodial Account - Direct Tuition Gifts - Income Shift & Assets to Grandchild • Employ Grandchild • Loans to Grandchild

15. Trusts • Crummy • Testamentary • Grantor Retained • Charitable Remainder

16. Sources Of Financial Aid • Merit • Academic • Athletic • Financial Need • Family Income & Assets • Other

17. Did You Know? • Qualify for Aid, Even Earning Too Much $$! • Colleges: • Compete for Students • Have Empty Seats • Pay for Good Students

18. Federal Methodology • Disburse Federal Aid Funds • Not Assessed: • Home, Family Biz Equity, Retirement Accts • FAFSA Form • Collects Information • Accredited Public, Private Colleges • Universities

19. Financial Needs Formula Example: Total College Costs $20,000 Expected Family Contribution (EFC) – 8,000 Financial Need $12,000

20. Income– Taxes – $2420 Allowance _________x 50% = Contribution From Income Assets – Nothing_______________ x 35% = Contribution From Assets Expected Family Contribution Student | | | | | | | | | |

21. Income– Living Allowance – Taxes_______ ______x 22 - 47% = Contribution From Income Assets – Allowance__________________________x 5.6% = Contribution From Assets Expected Family Contribution Parent | | | | | | | | | |

22. Student’s Contribution + Parents’ Contribution = Expected Family Contribution

23. Children in College

24. Public vs. Private College

25. Public Vs. Private Public UniversityPrivate University Aid Eligibility $ 4,130 Aid Eligibility $19,500 Gift Aid - 42% $ 1,735 Gift Aid p- 78% $15,210 Self-Help -58% $ 2,395 Self-Help -22% $ 4,290 --------------------------------------------------------------------------------------------- Out-of-Pocket $ 6,770 Out-of-Pocket $5,000 Total Cost – Aid Eligibility Total Cost – Aid Eligibility True Cost $ 9,165 True Cost $9,290 Total Cost – Gift Aid Total Cost – Gift Aid

26. Total College Costs • Tuition & Fees • Books & Supplies • Room & Board - on/off-campus living • Personal Expenses • Clothing, Insurance, Medical, Recreation, etc. • Transportation - daily commuting & round trip • Cost of Computer

27. Dates of Assessment • Income: 12/31 of Preceding Year • Assets:Market Value on Date of FAFSA App.

28. Meeting a Student’s Needs Choose college wisely, because: • Not all will meet needs Private colleges generally: • Meet higher % of need • Award higher % of gift aid • Can attend private for the same cost as public!

29. Appeal a Financial Aid Offer • First Award May Not be the Last • Follow Procedures • Adequately Document • Base Appeal Related to: • Income & Assets • Household Information • Any “special circumstances”

30. Special Circumstances • Elementary/High School Tuition • Excessive Medical Costs • Dislocated or Unemployed Worker • Federal Natural Disaster Area • Excessive Child Care Costs • Divorce, Separation or Death of Parent

31. Merit Aid • Scholarships Based on Talent • Tuition Discounts to Fill Seats • Create Competition for the Child • Colleges Desire Diversity

32. Marketing Athletes & Talents We Can Help You Learn: • How to get recruited • How to maximize scholarship offers • How to pay the balance of expenses

33. Do You Know • Eligibility Requirements? • When coaches start tracking athletes? • Chances of receiving a full scholarship? • How to get one college to compete against another to maximize your scholarships? • Best way to pay for remaining cost if you receive a partial scholarship?

34. We Can Help! • Pay Your Remaining College Costs • Comprehensive Fulfillment Service • Increase Cash Flow • Reduce Taxes & Expenses • Cost Containment Strategies

35. College Tuition Discounts • Do Not Publicly Offer Discounts • Elite Private Colleges Don’t Discount • Due to Competition, Colleges Offer Discounts • Position Student to Achieve Discounts

36. Tuition Discount Elements • Good Grades - SAT/ACT Scores • Solid Resume of Achievement • Early Application • Apply to Competing Schools • Apply to Schools with Low Yield Factor • Apply to 6-8 Colleges

37. Education Tax Strategies Allow IRS to Help Pay for College • Tax money saved: “tax scholarship” • Higher tax bracket, greater tax benefit • Review all strategies with advisor!

38. Use IRS to Help Fund College Parents • Income shifting to utilize tax capacity • Asset shifting to utilize tax capacity Children • Opportunities in the child’s tax return

39. Cash Flow for Education/Retirement • Increase Cash Flow? • Comfortable Monthly Savings? • Which Strategies to Use? • Decrease discretionary expenses • Debt consolidation

40. Cash Flow Strategies • Personal Budget Strategies • Mortgage Strategies • Investment Strategies • Asset Restructuring • Debt Restructuring

41. Before Debt Consolidation

42. After Debt Consolidation

43. Ever Thought About … The last time YOU put together a financial game plan for YOUR life?

44. Whose Money Will YOU Use For College? • Your Savings? • Your Income? • Loans? • Gifts?

45. Review • Develop Financial Game Plan • Fund Retirement, Then College • Link College & Retirement Strategies • Let IRS Fund Part of College Expenses • Market Your Student Properly

46. Your Next Steps Shirley Can Help You: • Qualify for Financial Aid • Reduce Taxes • Increase Cash Flow • Market Student • Methods to fund education & retirement

47. Thanks for Attending! • Seminar Evaluation Form • Tuition Rx Website Membership Form • Make Appointment with Shirley Now!