12. Low Hanging FruitObservations of what others have done... for your consideration and research. Tax incentives, possible product cost structures and school data/selection techniques are introduced.
13. An Inadvertent (mis)Use of an AnnuityHey- these things are like water balloons. 'Ya squeeze one end and who knows what may pop (burst) out of the other end?
In this video we look at the most rudimentary (aka short-sighted) use of a non-qualified annuity to lower an EFC. This well-worn ‘strategy’ does (by formula) increase eligibility for need-based Federal financial aid by removing an asset from the EFC calculation.
Just be aware that creating an annuity that subsequently may need to be used to pay for college in the short-term will change its disbursements to 'income'… and likely being more costly. We look at what happens when you try to get water out of this balloon.
Hey (part deux)- on the upside, after all the college years, we're all likely to be broke anyway...
14. 1,099 (approx) Reasons to be InvolvedAutomation is convenient but may be costly. The ‘Data Retrieval Tool’ used within the FAFSA to import your tax returns does a great job… indiscriminate, but great!
When you receive a 1099-R from any company due to a rollover, transfer, 1035 exchange or whatever, make SURE that its amount is NOT included in your EFC calculation. There are methods to verify that it should not belong and how to remove it.
The Financial Aid Administrator at each college has the authority (and capacity) to correct the data elements in a completed FAFSA to correct errors. Their system can then recalculate your ‘corrected’ EFC for Federal need-based financial aid eligibility.
15. More Dirt on the DRTThe FAFSA can now extract the student’s and parent’s data from their 1040s via the ‘Data Retrieval Tool’ (DRT). This make things ‘convenient’ but may decrease your eligibility for financial aid. The DRT apparently does not have built-in logic to detect excludable IRA rollover amounts and many other transactions common to financial planning.
All is not lost as edits are possible on the FAFSA… which triggers a ‘flag’ for the Financial Aid Administrator at the school to request ‘verification.’ Simply bring in your financial documents and verified corrections can be made… providing you with the correct eligibility for Federal need-based financial aid.
Talk to your financial planner if you have questions!
16. You May (Unfortunately) Be Specialpdf download: https://www.patreon.com/file?h=7166929&i=654522
Life happens- job changes, periods of unemployment, unusual medical expense, etc. And yet you still need to send your children to college.
All is not ‘lost’ as each school’s financial aid administrator (FAA) has the capability of changing your FAFSA’s data elements for ‘Special Cases’ in what is called ‘Professional Judgment.’
Think of the FAFSA as a data collection tool that takes a defined year’s tax return and assets as of the date the FAFSA is completed. Much can happen between this and when the child goes to his/her first class. For example, using a 2015 tax return for tuition payments beginning in 2017 is great in times of continuous employment… but not likely to represent the actual current situation.
17. How to Stash CashMany parents of college-bound children may be concerned with the treatment of a 'windfall' due to inheritance, property sale or prudent saving. With 'asset protection allowances' being relatively meager in both the Federal and Institutional Methodologies, it may be worthwhile to examine the +/- of where some may have 'stashed' their cash.
This video gives an overview of several options that may help preserve assets by tapping into increased eligibility for true financial aid such as grants and scholarships.
Every case may be different; there are many variables which may lead to many solutions. However, there appears to be one verified strategy that is not currently assessed, reversible, liquid and effective... whose details are reserved for my clients!
18. Ways to Pay- IntroThe FAFSA need-based formula will leave the majority of us nonetheless needing lots more money. Remember its definition of 'need-based' is for those with income of less than ~$50,000 and very few assets. It fills a need in this category by providing some grant money... while being a source of loans for others.
But what about families with dual income earners, modest means and several capable kids? College costs can easily dwarf an existing mortgage amount... and more.
This series of 'Ways to Pay' videos will lay the ground work of strategies that can reduce costs and expenses within the realm of paying (or financing) college educations.
19. Ways to Pay- a PrimerInstead of playing 'Whack-a-Mole' we lay the groundwork by defining concepts in terms of internal expenses, taxations, assessment and types of products.
You'll need these to help reduce the overall costs of college!
20. Manage Your ResourcesA basic overview on financial resources to pay for college.