Page 10 - Scene Magazine 43-03 March 2018
P. 10

Financial Scene
Can you save for college and retirement?
BY JACOB MILLER, CFP®
   Few of us have unlimited financial resources – which means that almost all of us need to pri- oritize our financial goals. Consequent- ly, you’ll have some decisions to make if
you’d like to help pay for your children’s college educations someday while, at the same time, saving for your own retire- ment.
Your first step in addressing these ob- jectives is to maintain realistic expecta- tions. Consider the issue of paying for col- lege. Right now, the average four-year cost (tuition, fees, room, and board) is about $80,000 for in-state students at public uni- versities and approximately $180,000 for private schools, according to the College Board. And these costs are likely to keep rising in the years ahead. Can you save this much for your kids’ education?
Instead of committing yourself to putting away this type of money, take a holistic approach to saving for your chil- dren’s higher education. After all, you probably won’t be the only one to help pay for college. Depending on your in- come and assets, your family might be eligible for some needs-based financial aid awarded by the college. Also, you should encourage your children to apply for as many scholarships as possible – but keep in mind that most scholarships don’t
provide a “full ride.” Here’s the bottom line: Don’t assume you will receive so much aid that you don’t need to save for college at all, but don’t burden yourself with the ex- pectation that you need to pick up the full tab for your children’s schooling.
On a practical level, you may want to commit to putting a certain amount per month into a college savings vehi- cle, such as a 529 plan. You can gener- ally invest in the 529 plan offered by most states, but in some cases, you may be eligible for a state income tax incen- tive. Also, all withdrawals from 529 plans will be free from federal income taxes, as long as the money is used for a qualified college or graduate school expense of the beneficiary you’ve named. (Withdrawals for expenses other than qualified educa- tion expenditures may be subject to fed- eral and state taxes and a 10% penalty on the earnings.)
By starting your 529 plan early, when your children are young, you’ll give the investments within the plan more time to grow. Plus, you can make smaller con- tributions on a regular basis, rather than come up with big lump sums later on. And by following this approach, you may be in a better financial position for invest- ing in your IRA and your 401(k) or other employer-sponsored retirement plan. Ob- viously, it’s to your benefit to contribute as much as you can to these plans, which offer tax advantages and a wide range of investment options. If you’re investing in a 401(k) or similar employer-backed plan, try to boost your contributions every time your salary increases. At the very least, always put in enough to earn your employer’s matching contribution, if one is offered.
And once your children are through with college, you can discontinue saving in your 529 plan (although you may want to open another one in the future for your grandchildren) and devote more money to your retirement accounts.
It can certainly be challenging to save for education and retirement – but with discipline and perseverance, it can be done. So, give it the “old college try.”
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
   HARPER CREEK COMMUNITY SCHOOLS
STUDENT ACHIEVEMENT & EQUITY
Achievement scores and growth will be at or above state average in all content areas.
SAFE AND NURTURING ENVIRONMENT
Harper Creek Community Schools will provide a safe and nurturing environment to ensure optimum learning.
STUDENT/PARENT/COMMUNITY PARTNERSHIP
The District will continue to be the “Cornerstone of the Community”. Our community will have the opportunity for participation and involvement in the education process. The District will provide a wide variety of options for parent and community involvement. The District will emphasize the importance of student involvement in curricular and extracurricular activities, participation of parent’s in their student’s learning and open relationship with the community.
TALENT RECRUITMENT & DEVELOPMENT
Harper Creek Community Schools is committed to employing excellent people through recruiting quality candidates and developing current and future staff through ongoing professional development. Professional Learning Communities will be used as the vehicle for continued school improvement.
FINANCIAL HEALTH
Harper Creek Community Schools is committed to ensuring the long-term success of the district through sound financial management.
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