A good college education is more important in today’s job market than it has ever been. It is nearly impossible to make a comfortable living without at least a 2-year degree from a community college. Parents today understand that sending their kids to college is the best way to help them succeed in life. It can be tempting to throw all of your resources toward that college education, even if it means cutting into your retirement savings. While college is important, you should never sacrifice your future stability to pay for tuition and books.
Fewer Options for Retirement Funds
Your child has a multitude of resources to help pay for tuition. Your retirement funds, on the other hand, are strictly limited to what you can invest in them right now. Help your child find alternatives to paying for tuition straight out of your pocket. Find out if your state has a special savings account option for tuition. The federal and state governments have created many different ways to help students get the education they need in order to become productive members of today’s society. Federal and state help with the financial needs of retired seniors is far less available.
Finding the Right Scholarships and Grants
Your young student’s performance in school could be a powerful investment toward his or her college costs. Scholarships are available from hundreds of different organizations for hundreds of different qualifications. A quick visit to the high school counselor will introduce you to thousands of dollars in potential scholarships and grants that you child could become eligible for. If you look into scholarship options early enough, your child could work toward meeting specific qualifications throughout high school, which could mean that you have to pay very little toward college.
Less Expensive College Alternatives
If the scholarship and grant money isn’t enough to cover a traditional 4-year college tuition, some alternatives can cut down on the costs of a degree. Consider sending your child to a community college for the first two years. Community colleges are ideal bridges to 4-year institutions because they allow the student to live at home and become used to being independent while providing all of the lower division courses necessary to transfer to a university. Your student can also test out of basic courses by passing a single test, the College Level Examination Program (CLEP). Passing CLEP cuts down on the number of classroom hours necessary for degree completion and therefore the cost of education. Working at least a part time job is another way to help offset college costs.
Staying Independent during Retirement Years
Eliminating the financial burden of college by dipping into your retirement savings is simply shifting that burden from right now to later. If your retirement funds are not adequate when you are older, you could eventually need to ask your children for help. It is better to help your children deal with financial hardships while they are still learning how to become independent than to need to ask for help when they have their own families to manage later.
Jessica Bosari writes about personal finance for Billeater, a site dedicated to helping families with money saving tips and advice.
Opening an IRA account is one of the best decisions that you can make for your future retirement. It allows you to save a lot of funds that will allow you to live comfortably in the future. However, it is also important to choose wisely the type of investment for your IRA account. By having the right type of investment for your IRA account, you will be able to handle your finances wisely and avoid losses in the future.
Conservative investors would usually choose certificate of deposits or CDs for their investment option. CDs are considered as money in the bank, some financial institutions are also insured by NCUA for credit unions and FDIC for banks. This means that investing in CDs is virtually free of risks. You will be given a fixed rate and a fixed term and you gain interests when your term matures. It is pretty simple. CDs are like regular savings accounts where you need to have a minimum deposit and you gain interest for that. The only difference is that you will not be allowed to make withdrawals from your CD accounts. You have to wait until your term matures before you will be allowed to make distributions. This allows to banks to use your money for other things. As a prize you get a higher interest rate compared to regular savings account.
The IRA interest rates for CDs usually depends on the type of CD you plan on investing in. Jumbo CDs have the highest IRA rates; however, it may also require a larger amount of minimum deposit. To find the best IRA rates for your CDs, it is important that you shop around for IRA interest rates from one financial institution to another. You may need to maintain a list of the companies, along with the IRA rates and fees to find the best financial institution for your CD investment.
If you are saving for retirement by placing all your extra money into a savings account then you may be saving your money in the worst way possible. With a savings account there are minimal rules for the withdrawal of your money and no limits on how much you can place into the savings, but the amount of interest earned is practically non-existent. If your money is only placed into a savings account then over the years you are technically losing money.
This is due to inflation and in order to beat inflation a person saving for retirement must place their money into a retirement fund or invest the money. Otherwise the funds saved in a typical savings account will be worth much less than expected when time to cash in during retirement. Discussed below in this article are a few of the details that pertain to a Roth IRA and if you click here you can learn more.
A Roth account is a savings account specifically for retirement that is taxed the same year the money is put into the account. There are retirement accounts that allow for your money to grow and be placed into the account without taxes being applied until the money is withdrawn, but this is not the structure of a Roth IRA. Having your money taxed before being withdrawn is a benefit to some people but a disadvantage to others and this is typically the deciding factor for those in decision about a Roth.
Eligibility to contribute to a Roth IRA phases out at certain income levels, meaning if you make to much money you can not have a Roth. Most other retirement plans do not have this rule, but the worries are not to high because you have to make over $179,000 a year depending on your specific filing status in order to be cut off from having a Roth.
Also there are contribution limitations pertaining to a Roth in which depending on your filing status you can only contribute so much money a year to the fund. This defers most people and thus depending on your financial status you can decide if a Roth is right for you.
Paying taxes can be somewhat miserable for most American small businesses, but right after you go through that whole tax paying process, you can experience one of the most exhilarating things ever, getting your tax refund back. What a happy feeling it is to get a chunk of money once a year, know that you’ve earned it, and know that it’s yours to spend or save.
You can use that refund to get some work done around the office, or pay a delinquent bill. There are also many constructive uses for your tax refund as well. If you are unsure how to spend your refund, then you should try to do something constructive with it, rather than wasting it on junk and fluff items.
You can choose to invest your refund in stocks or bonds. The best way to go about this is to select a stable mutual fund with a good reputation, from a solid company. You can dip into the active market, but there’s a chance you can lose all your money. The stock market moves a lot like gambling, so if you don’t know what you’re doing, it’s best to steer clear of it.
Another smart thing to do is to put your refund away in savings. Just put it in an interest earning savings account with a good bank, and let it earn money for you.
You can also invest in the bank of reciprocity by giving back to your community. This is just as good as buying publicity if your a small business. You can send out press releases, and have your activity covered in the local paper. Many folks believe that what goes around comes around. So if you do good, good will come back to you.
The best thing to do when you get your refund is to avoid impulse spending with your money. Even if you would like to spend the money, just hold it for one to three months before you spend any of it. This will allow you to make your intentions clear, maybe streamline your shopping list, or even window shop around some for the best deals.