January 2012 Personal Finance Newsletter
January 17, 2012 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The January 2012 personal finance newsletter is now available. It includes a 2011 investment market recap from Dimensional Fund Advisors with data on all the major indices and a summary of the major investing themes of 2011. In addition, there’s a comparison between the dividend rates of the S&P 500 and interest rate on treasuries and commentary of what this means to your portfolio. Plus, the newsletter announces the first half of 2012 schedule for Keller Financial Planning Workshops at the Keller Public Library. To read the newsletter, click here.
FAQ on the Federal Financial Aid Application
December 30, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
If you have a child who’s attending college in the fall, it’s time fill out the federal government’s Free Application for Federal Student Aid, the FAFSA. The FAFSA, should be filed as soon after January 1 as possible in the year your child will be attending college. The reason is that some federal aid programs operate on a first-come, first-served basis, so filing the application early ensures your child has the best chance of receiving the most favorable aid package.
Even if you don’t expect your child to qualify for federal aid, you should still consider filing the FAFSA because colleges often require it as a prerequisite for students to be eligible for the college’s own institutional aid.
Here are some common questions and answers regarding the application process.
What documents will I need to fill out the FAFSA?
The FAFSA relies on financial information from your previous year’s federal income tax return; for example, a FAFSA completed in 2012 will rely on information contained in your 2011 return. So the papers and statements you use to file your tax return are generally the same ones you would need to fill out the FAFSA, such as Social Security numbers, W-2 information, and information on savings, investments, and business assets. Your child will also need to have this information.
But here’s a dilemma: since most parents probably won’t complete their federal income tax return in January, how can they fill out the FAFSA, which relies on figures from their tax return? There are two possible solutions. The first is to prepare your tax return earlier. The second is to prepare (or hire a tax professional to prepare) an estimated tax return, which can then be used to complete the FAFSA–a practice the federal government deems acceptable. If you use an estimated tax return, keep in mind that you will need to provide a final tax return later on.
How do I file the FAFSA?
You can complete a paper FAFSA or file it electronically. The way you submit the FAFSA does not affect your child’s eligibility for aid.
You can get a paper FAFSA at your child’s high school or your local library. Once it’s complete, you should make a copy for your records and mail it in the preaddressed envelope that comes with the form.
You can file an electronic FAFSA at www.fafsa.ed.gov. You’ll need to apply for a PIN before you can actually start filling out the online application. Electronic FAFSAs offer several advantages over paper FAFSAs: detailed online help screens, an online chat option with a customer service representative, built-in error detectors, confirmation that the application was transmitted successfully, and faster processing–one week as opposed to two to four weeks for paper FAFSAs.
If you’ve previously filled out the FAFSA4caster, the federal government’s online financial aid forecasting tool, the online FAFSA will be automatically populated with your data.
What happens after I file the FAFSA?
After your FAFSA is processed, you will receive a Student Aid Report (SAR) either in the mail or electronically (depending on how you filed the FAFSA). This document summarizes data from your FAFSA and indicates your official expected family contribution (EFC), which is the amount of money the government expects your family to contribute to college costs for the current year to be eligible for financial aid. For example, “EFC25000″ means that your expected family contribution is $25,000.
You should review the SAR carefully to make sure it contains your correct income and asset information. Any corrections should be made immediately and sent back for reprocessing. If you have questions, you can contact the Federal Student Aid Information Center at 1-800-433-3243.
If there is an asterisk (*) next to your EFC figure, you have been selected for verification. FAFSAs are selected for verification randomly, or because the FAFSA is incomplete or contains estimated tax information. If you are selected for verification, you will need to provide additional documentation that might include a final tax return, household information, or appraisals for certain assets listed on the FAFSA. Not all families selected for verification will need to submit the same documents.
The SAR is also sent to each college you listed on your FAFSA. Once the college receives your child’s SAR, the financial aid administrator at each school that has accepted your child will craft an aid package that tries to meet your child’s financial need (remember, colleges aren’t obligated to meet all of it). To determine your child’s need, the administrator subtracts your EFC from the cost of attendance at that particular college. Your child will then be notified of the college’s aid package in an award letter sent out in the spring. The package typically includes various combinations of federal and college loans, grants, scholarships, and work-study jobs.
December 2011 Personal Finance Newsletter
December 20, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The December personal finance newsletter is now available. It includes information on a new student loan repayment program going into effect in January 2012, gift tax strategies, and tips on keeping your online accounts secure. Plus, for those that enjoy history, there’s some perspective on stock market cycles and the effect of being in and out of the market at particular times. Please click here to read the newsletter. Happy holidays!
November Personal Finance Newsletter
November 14, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The November personal finance newsletter is now available. It includes all the updates on 2012 IRA and retirement plan contribution limits, plus the 2012 social security and medicare figures. In addition, we cover the importance of long term care planning for women and information on a free upcoming long term care insurance workshop at the library. The newsletter also includes tips on planning for required minimum distributions, an update on college costs, and a market update. Click here to read it.
August Personal Finance Newsletter
August 15, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The August personal finance newsletter is now available. It features a Q&A on the debt ceiling, downgrade, and market response. Plus there’s a follow-up on the ABCs of Trusts article from last month’s newsletter, suggestions on talking with your high school student about college costs, an analysis of the real costs of keeping your long-term investment assets in cash, an overview on the difference between Medicare and Medicaid, and more. To read the newsletter, click here.
College Savings Workshop for Texans
August 9, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
Learn how to save for your child’s college cheaply and save on taxes at the same time. I am presenting a free financial planning workshop on tax-efficient college savings for Texans at the Keller Public Library on Tuesday, August 16 at 6:30 pm. As kids head off to schools for the fall and the focus is on education, it’s a great time to look ahead and make plans for funding college tuition.
Workshop attendees will learn:
- Options available to save for college
- How college savings affects financial aid
- What unique opportunities we have as Texas residents
- How to skip paying sales commissions on your college savings investments
- How to minimize investment risk as your child gets close to college
Registration is encouraged for planning purposes to library@cityofkeller.com. I hope to see you there!
Insurance When a Child Goes to College
August 1, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
As you send your child off to college, you probably have a lot of things on your mind, such as whether your child will eat right and get enough sleep, how to pay tuition, and what to do with that empty bedroom. And although insurance may seem like a low priority, there are some important issues you should consider.
Health Insurance
Even if your child isn’t a student, the Patient Protection and Affordable Care Act requires your medical plan to extend dependent coverage for your adult child up to age 26. But if the plan is an HMO and your child’s college is far from home, you should check in advance on whether HMO-approved providers are available in the area. If they aren’t available, one option is to purchase health insurance coverage through your child’s college. Many colleges and universities offer low-cost health insurance for students.
Property Insurance
If your child will be living in a dorm or other university housing, his or her personal property will typically be covered under your homeowners insurance policy. However, you may want to check your policy for coverage limitations on certain items (e.g., computers and stereos). If your child moves out of the dorms and into an apartment, his or her personal property will usually no longer be covered under your policy. In that case, he or she should purchase a renters insurance policy to cover his or her possessions.
Auto Insurance
If your child will be taking a car to school, make sure that the car is properly insured. If the child owns the car, the insurance policy must be in his or her name. If the child is “borrowing” a family car, he or she must be listed as a driver on the insurance policy. Some insurance companies may require the child to be listed as the primary operator, since the car is in the child’s possession and not the parents’.
June Personal Finance Newsletter
June 17, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The June personal finance newsletter is now available. It includes an investment market update and articles on several personal financial planning topics. There’s information on how long to keep financial records, perspective on the debt ceiling debate, an update on the new “net college cost” calculators, and information on the veteran’s pension. There’s also an invitation to the Keller Library Personal Finance workshop on June 28 — this month’s topic is the basics of Life and Disability insurance for those in their working years. Click here to read the newsletter.
Evaluating Financial Aid Awards
March 29, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
If you have a child attending college in the fall, you’re probably knee-deep in reviewing options for different schools, financial aid, and scholarships. I just came across this quick reference guide from FinAid, and it’s a great summary to guide you in deciphering the offer letters and making decisions. http://www.finaid.org/fafsa/FinancialAidAwardLetters.pdf Good luck!
January 2011 Personal Finance Newsletter
January 14, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The January newsletter is now available with a 2010 investment market recap, a humorous look at investing resolutions for the new year, and details on the estate tax changes enacted in December. It also includes an announcement of topics for the Keller Public Library personal finance workshop series for January – June. Click here to read the newsletter.