Learn about Socially Responsible Investing
Contact Frankly Financial for Retirement and Insurance Planning Assistance


It isn't how much you make
. . .It's how much you keep!

Archive for College Savings

Want to help YOUR KIDS – Consider a 529 College Plan

Posted by Frank McKinley on
 May 26, 2021
  · No Comments

Tax-FREE distribution; Potential financial aid!

What’s not to like?

May 29 (5-29) is National College Fund Day!

Did you know you can help fund you child’s or grandchild’s college education on a tax-FREE basis* AND potentially receive financial aid (for NJ residents see attachment)?

Why use a 529 College Plan?

  • Easy to establish
  • Professional management
  • Flexible contributions
  • Control over withdrawals

*Tax benefits** – Growth is tax-deferred and if used for secondary education is free from Federal income tax and many State’s Income tax.

Please call me to discuss the benefits of helping fund a 529 plan for your child, grandchild, or a friend’s child. There are also estate planning benefits which may help you and your grandchild. Plans can be funded with a single check, a systematic investment, or an accelerated program to maximize estate planning. And the account owner maintains control over the withdrawals in case your needs ever change.

And Financial Aid is available for NJ residents

based on how much you invest, and for how long.

**Please Click here for More Information

If you or anyone you know has questions about this, please call me 973-515-5184!

Categories : 529 Savings Plans, College Savings, Financial Services

How Much Do You Need to Save for College?

Posted by Frank McKinley on
 June 15, 2020
  · No Comments

The ever-rising cost of college is common knowledge. Depending on the school a student chooses, the cost of tuition, room, and board for an undergraduate
degree can easily exceed six figures. With costs so high, many parents are simply overwhelmed. Saving enough to cover all of a child’s college education expenses may seem like an impossible goal. Many parents don’t get started, or if they do save, they don’t save enough.

If you want to help your children pay for their college costs, you need a clear savings strategy. Below are some simple guidelines for determining how much you really need to save.

Estimate How Much College Will Really CostHow much will you need to save for college?

According to data from the College Board, a year of tuition, room and board in the 2018-19 academic year costs $21,270 at a public institution and $48,510 at a private nonprofit institution. Assuming future increases of 3% annually, that means in 18 years, a year of college will cost more than $36,000 at a public
school and roughly $82,000 at a private school.

Those estimates are staggering. Of course, it’s possible college costs will level off or increases won’t be quite so steep. But in any case, the young children of today will likely face much higher college costs than students do today.

Why does all this matter? Because you need to get a sense of what it might actually cost your child to attend college. If you have a baby who was born this year and hope to send him/her to a private four-year college, you’d need to save about $328,000 to cover all the costs.

Decide How Much You Want to Save

Once you have an idea of how much your children’s college might cost, you can set realistic savings targets.

Say you want to be able to cover 80% of the cost at a four-year, private college for your child, with the expectation that your child will either obtain grants or scholarships or take out loans to pay the remaining portion. That means a savings goal of $262,000 at the end of 18 years. To hit that target, you’d need to set aside about $728 a month, assuming annual returns of 6%. If you want to cover 80% of the costs of a four-year education at a public college (estimated
at $144,000), you’d need to save $115,000. To reach that goal, you’d need to save about $372 a month, assuming annual returns of 6%.

If your initial savings estimates are high, consider tweaking your goals. Meeting 80% of your child’s estimated college costs may be unreachable, but 70% may be a more achievable goal.

Also, consider other sources you can tap to boost savings. Grandparents may be willing to make contributions. Monetary gifts your child receives for birthdays and other milestones can be added to a college fund. Finally, don’t count out the possibility of financial aid.

Create a Plan

The estimates above are just that — estimates. Unfortunately, many parents have little idea how to get started saving.

Sticking funds in a low-interest savings account reduces risk, but means you’ll have to save more. A 529 college savings plan, which offers tax advantages and access to investments, could be a better way to reach your goals.

To create your own college savings plan, you’ll need to think carefully about your family and your situation.

Please call me at 973-515-5184 if you’d like to
discuss this topic in more detail.

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, College Savings, Financial Services

Spring Cleaning Your Way to Better Finances

Posted by Frank McKinley on
 March 26, 2020
  · No Comments

Spring is a good time to clean out the cobwebs, and not just in your home or apartment. Your personal finances can benefit from a good spring cleaning, too. Here are some questions to ask yourself regarding your budget, debt, and taxes.

Is there room in my budget to save more?

A budget is the centerpiece of any good personal financial plan. After tallying your monthly income and expenses, you hopefully have money left over to save. But… is there room to save even more? Review your budget again with a fine-tooth comb to see if you might be able to save an additional $25, $50, $100, or $200 per month. Small amounts can add up over time. If you participate in a workplace retirement plan, you might not even notice your slightly smaller paycheck after you increase your contribution amount.

If your expenses are running neck and neck with your income, try to cut back on discretionary spending. If that’s not enough, look for ways to lower your fixed costs or explore ways to increase your current income. Budgeting software and/or smartphone apps can help you analyze your spending patterns and track your savings progress.

Do I have a strategy to reduce debt?

When it comes to your personal finances, reducing debt should always be a priority. Whether you have debt from student loans, credit cards, auto loans, or a mortgage, have a plan to pay down your debt as quickly as possible. Here are some tips.

  • Credit cards. Keep track of your credit card balances and be aware of interest rates and hidden fees; manage your payments so you avoid late fees; pay off high-interest debt first; and avoid charging more than you can pay off at the end of each billing cycle.
  • Student loans. Are you a candidate for income-based repayment? You can learn more at the Federal Student Aid website.
  • Additional payments. Making additional loan payments above and beyond your regular loan payments (or the minimum payment due on credit cards) can reduce the length of your loan and the total interest paid. Online calculators can help you see the impact of making additional payments. For example, if you’re halfway through a 30-year, $250,000 mortgage with a fixed 4.5% interest rate, an additional principal payment of $150 a month can shave two years off your mortgage. An extra $250 a month can shave off three years!
  • Refinancing. If you currently have consumer loans, such as a mortgage or auto loan, take a look at your interest rate. If you’re paying a higher-than-average interest rate, you may want to consider refinancing. Refinancing to a lower interest rate can result in lower monthly payments and potentially less interest paid over the loan’s term. Keep in mind that refinancing often involves its own costs (e.g., points and closing costs for mortgage loans), and you should factor these into your calculation of how much refinancing might save you.
  • Loan consolidation. Loan consolidation involves combining individual loans into one larger loan, allowing you to make only one monthly payment instead of many. Consolidating your loans has several advantages, including saving you time on bill paying and record keeping and making it easier for you to visualize paying down your debt. In addition, you may be able to get a lower interest rate.
  • Paying down debt vs. investing. To decide whether it’s smarter to pay down debt or invest, compare the anticipated rate of return on your investment with the interest rate you pay on your debt. If you would earn less on your investment than you would pay in interest on your debt, then using your extra cash to pay off debt may be the smarter choice. For example, let’s say you have $2,000 in an account that earns 1% per year. Meanwhile, you have a credit card balance of $2,000 that incurs annual interest at a rate of 17%. Over the course of a year, your savings account earns $20 interest while your credit card costs you $340 in interest. So paying off your credit card debt first may be the better choice.

Do my taxes need some fine-tuning?

Spring also means the end of the tax filing season. You might ask yourself the following questions:

  • Am I getting a large tax refund or will I owe taxes? In either case, you may want to adjust the amount of federal or state income tax withheld from your paycheck by filing a new Form W-4 with your employer.
  • What else can I learn from my tax return? Now is also a good time to assess tax planning opportunities for the coming year, when you still have many months left to implement any strategy. You can use last year’s tax return as a reference point, then make any anticipated adjustments to your income and deductions for the coming year.

If you have questions or would like more information
please contact Frank

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.

This communication is strictly intended for individuals residing in the state(s) of CO, CT, FL, NJ, NY, NC, OH, PA and RI. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

 

Categories : College Savings, Credit Card Debt, Investing
Tags : , ,

For College Savings, 529 Plans Are Hard to Beat

Posted by Frank McKinley on
 December 2, 2019
  · No Comments

Raising kids is hard enough, so why not make things easier for yourself when it comes to saving for college? Ideally, you want a savings vehicle that doesn’t impose arbitrary income limits on eligibility; lets you contribute a little or a lot, depending on what else happens to be going on financially in your life at the moment; lets you set up automatic, recurring contributions from your checking account so you can put your savings effort on autopilot; and offers the potential to stay ahead of college inflation, which has been averaging 3% to 4% per year.1 Oh, and some tax benefits would be really nice, too, so all your available dollars can go to college and not Uncle Sam. Can you find all of these things in one college savings option? Yes, you can: in a 529 plan.

Benefits

529 college savings plans offer a unique combination of features that are hard to beat when it comes to saving for college, so it’s no surprise why assets in these plans have grown steadily since their creation over 20 years ago.

Eligibility. People of all income levels can contribute to a 529 plan — there are no restrictions based on income (unlike Coverdell accounts, U.S. savings bonds, and Roth IRAs).

Ease of opening and managing account. It’s relatively easy to open a 529 account, set up automatic monthly contributions, and manage your account online. For example, you can increase or decrease the amount and frequency of your contributions (e.g., monthly, quarterly), change the beneficiary, change your investment options, and track your investment returns and overall progress online with the click of a mouse.

Contributions. 529 plans have high lifetime contribution limits, generally $350,000 and up. (529 plans are offered by individual states, and the exact limit depends on the state.) Also, 529 plans offer a unique gifting feature that allows lump-sum gifts up to five times the annual gift tax exclusion — in 2020, this amount is up to $75,000 for individual gifts and up to $150,000 for joint gifts — with the potential to avoid gift tax if certain requirements are met. This can be a very useful estate planning tool for grandparents who want to help pay for their grandchildren’s college education in a tax-efficient manner.

Tax benefits. The main benefit of 529 plans is the tax treatment of contributions. First, as you save money in a 529 college savings plan (hopefully every month!), any earnings are tax deferred, which means you don’t pay taxes on the earnings each year as you would with a regular investment account. Then, at college time, any funds used to pay the beneficiary’s qualified education expenses — including tuition, fees, room, board, books, and a computer — are completely tax-free at the federal level. This means every dollar is available for college. States generally follow this tax treatment, and many states also offer an income tax deduction for 529 plan contributions.

Drawbacks

But 529 plans have some potential drawbacks.

Tax implications for funds not used for qualified expenses. If you use 529 plans funds for any reason other than the beneficiary’s qualified education expenses, earnings are subject to income tax (at your rate) and a 10% federal penalty tax.

Restricted ability to change investment options on existing contributions. When you open a 529 college savings plan account, you’re limited to the investment options offered by the plan. Most plans offer a range of static and age-based portfolios (where the underlying investments automatically become more conservative as the beneficiary gets closer to college) with different levels of risk, fees, and management objectives. If you’re unhappy with the market performance of the option(s) you’ve chosen, you can generally change the investment options for your future contributions at any time. But under federal law, you can change the options for your existing contributions only twice per year. This rule may restrict your ability to respond to changing market conditions, so you’ll need to consider any investment changes carefully.

Getting started

529 college savings plans are offered by individual states (but managed by financial institutions selected by the state), and you can join any state’s plan. To open an account, select a plan and complete an application, where you will name an account owner (typically a parent or grandparent) and beneficiary (there can be only one); choose your investment options; and set up automatic contributions if you choose. You are then ready to go. It’s common to open an account with your own state’s 529 plan, but there may be reasons to consider another state’s plan; for example, the reputation of the financial institution managing the plan, the plan’s investment options, historical investment performance, fees, customer service, website usability, and so on. You can research state plans at the College Savings Plans Network.

1 College Board, Trends in College Pricing, 2014-2018

 

Categories : Blog, College Savings, Financial Services

What do YOU have to be thankful for?

Posted by Frank McKinley on
 November 6, 2017
  · No Comments
November 2017 Newsletter from Frankly Financial
Categories : College Savings, Financial Services, Newsletters, Tax

Archives

 

Frankly Financial | Copyright © 2014. All Rights Reserved.
Site Designed by TriDelta Design Group