Saving For College

Filing Taxes Last Minute

Peoria

Filing an extension: If you feel you cant get your taxes filed by April 18, then you can file an extension. This will give you until October 17 to file your taxes.

Its important to note that everyone must file paperwork by April 18 – whether youre filing your taxes or filing for an extension, you need to notify the government of your intentions by this deadline. Late filing penalties run five percent of unpaid taxes for each month or partial month that your return (or extension form) is late.

To itemize or not to itemize? Generally, you must decide whether to itemize deductions or to use the standard deduction. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than your standard deduction, you can usually benefit by itemizing.

Plan ahead for next year: No one likes dealing with taxes, but if we make this more of an ongoing process each year, we will become more organized and less stressed out when April rolls around. Gathering up all your documents and scurrying at the last minute, you are most likely going to miss some key areas that could have benefitted you if you had given yourself more time. Plan ahead next year to reduce stress and become more organized.

What to do with your tax refund
Debt: There is good debt and bad debt. Pay down high interest debt, like credit cards with double digit interest rates. Take an inventory of your current debt and prioritize those liabilities with the highest interest rates.

Emergency Fund: Establish or build up your emergency fund. Typically a good fund has a balance of about six months of household expenses, but it could be even more if it makes you sleep better at night. Your emergency fund should be save and liquid, so keep it in a high interest savings account, separate from your more risky retirement investments.

College Fund: If you are behind in saving for college for your children, using that tax refund toward a college savings account would be a great investment in their future. Consider your state sponsored 529 plan. Some states even give you a tax deduction for making contributions to your home states 529 education account.

Retirement: Invest in your retirement. If you are under age 50, you can invest $5,500 in a Traditional or Roth IRA for 2016. You get to do an extra $1,000 catch-up if you are 50 years old or older. If you qualify to do a deductible IRA contribution, you check two things off the list: (1) saving for retirement; (2) lowering your 2016 tax bill!

Health Membership: Invest some of that return into getting back in the gym and building a fitness plan. You will thank yourself later! Family fitness club memberships are a great way to spend time with the family and promote a healthy lifestyle.

For more information, visit here.

Copyright 2016 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Save for Retirement or College?

Younger parents say saving for college is their top financial priority, according to the most recent College Savings Indicator study from Fidelity Investments. The sentiment is understandable, as many of those surveyed were likely scarred by their own high costs of college and lingering student loan payments.

But prioritizing future college costs for their children over saving for retirement could be a costly mistake. Heres why younger moms and dads should put their own retirement needs ahead of potential college costs.

An Uncertain Expenditure

Most parents hope their children attend some form of higher education after high school. But a good share of kids dont immediately head off to college.

The American Council on Education says that as of 2013 (the year with the most recent calculations), 65.9 percent of recent high school graduates subsequently enrolled in a two- or four-year higher education institution. In other words, a third of young adults didnt have any college costs to cover. That figure marked the fourth straight annual decline since 2009, and the trend was reflected across the entire income spectrum.

Even when your clients are sure that their children will go to college, they shouldnt stress out over the perceived future cost of an Ivy League education. The National Center for Education Statistics says that about four times as many students are enrolled in public higher education institutions than private schools. The majority of those students attending public institutions go to in-state schools that offer lower tuition expenses.

Better to Borrow?

Sure, repaying student loan principal and interest can be a nightmare for students and their families. But the reality may be less frightening than they imagine.

First, the payments may not be that bad. If a student leaves school owing a scary $35,000 with, say, a 6 percent interest rate, that balance could be repaid in 10 years by paying $388 per monthor about $5,000 per year.

Second, the interest on qualified student loans may be tax-deductible by up to $2,500 per year, even if the taxpayer doesnt itemize.

The student loan payments and balances can even by reduced or eliminated by the borrowers employer, a stint in certain public service occupations, or by an income-based repayment program.

Although student loans are readily available to most students, parents who dont save enough will have a hard time borrowing to pay for unfunded retirement costs.

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Strategies to Maximize College Savings and Financial Aid

Paying for college is a significant concern for many families.
Federal financial aid may be a deciding factor in where a student goes to college, even for families who have been diligently saving. With proper planning, its often possible to develop a strategy to help maximize your familys financial aid eligibility.

Whether youre relying on aid,
loans, or plan to self-fund, knowing the benefits and limitations of college savings vehicles can help you navigate your options.

Calculating projected federal aid is complex. This guide is not intended to be used as a calculation tool, but rather to highlight what assets and income are factored into the calculation, how theyre weighted and what strategies may be able to help students qualify for need-based financial aid.

What determines financial aid? Most families applying for financial aid only need to complete the Free Application for Federal Student Aid form. FAFSA is used to determine federal financial aid eligibility, grants and scholarships. The form also is used by many
state and private institutions, as they often provide students additional aid, loans and merit-based awards.

[Read: How to Invest in Marijuana Legalization.]

FAFSA considers a number of factors when determining need-based eligibility, including income and assets of the student and parents, as well as household size and the number of children attending college. These and other details are entered into formulas and ultimately combined to produce the expected family contribution. The EFC is calculated before each school year and drives the amount of award a family can expect to receive.

For dependent students, parent income counts for a large portion of the aid calculation. At a high level, a parents adjusted gross income from their tax return is used, minus certain deductions and allowances provided by FAFSA depending on income, before pre-tax contributions to qualified retirement accounts and health savings accounts are added back. The formula then subtracts federal, state and FICA taxes, and other employee allowances. The resulting available income can then be multiplied by a factor as high as 47 percent – which is counted as parent income on the FAFSA form.

Its important to note that income is defined more broadly than traditional wages and salary. For example, distributions from a parents
IRA or Roth IRA, as well as capital gains from any liquidated investment accounts, may also be considered income.

[See: 7 Stocks That Will Ruin Your Portfolio.]

Parent assets are counted much more favorably than assets in the students name. Assets in the parents name – including student-owned
529 plans – receive a maximum weighting of 5.64 percent annually. Parents also receive a savings allowance, which is determined by FAFSA. Retirement assets are not included, but cash, brokerage accounts and even investment real estate can be fair game.

Student assets are not given a savings allowance, so 100 percent of the value is considered; however, only 20 percent of assets are available for aid purposes. Student income weighs much more heavily on aid eligibility. Half of the students income is considered by the FAFSA program. The higher the income, the less financial aid he or she is likely to receive.

Theres a temptation to overlook the importance of student income, as many college-bound students arent high earners. Its critical to understand what constitutes student income on the FAFSA. For the EFC calculation, qualified distributions to the student from a
529 plan owned by a non-parent, such as a grandparent or relative, is considered income to the student. Distributions from student or parent-owned 529 plans are not counted as
income under the EFC calculation, as they were already listed as an
asset.

Strategies to maximize financial aid benefits. Although both income and assets can limit financial aid eligibility, there are ways to strategically plan to maximize benefits.

Last September, President Barack Obama changed the income year for which the FAFSA determines aid eligibility. Instead of looking at the prior years income, aid will begin evaluating income in the prior, prior year. For students entering their freshman year in 2017, FAFSA will look at 2015 income.

[See: How to Bet on the US Consumer.]

This change means families will need to begin looking at their complete financial picture even earlier, to determine what (if any) aid they could expect and where opportunities may exist to retitle assets or develop a liquidation plan for qualified distributions.

Liquidation and ownership of 529 plans. Consider using the funds in a parent-owned 529 plan before a grandparent or relative-owned plan. Since non-parent held plans are currently not considered by FAFSA as either income or assets of the college-bound family, these savings wont have an impact on aid eligibility unless they are liquidated or retitled. Once liquidated, the amount is considered as income to the student, and 50 percent of the funds can be applied towards the EFC.

Another strategy, if permitted by the state where the 529 plan is held, is to transfer ownership of a non-parent 529 plan to the parent. Although the funds will now be considered an asset, recall that parent assets are only weighted at a maximum of 5.64 percent. Also, any distributions from the plan will not be counted as income, which is included at a much higher rate.

Finding the most efficient strategy to cover college expenses will vary for each family. For families with sufficient income and assets to cover gaps, it may also be beneficial to use non-parent owned 529 plan distributions in lumps – either in the first or last year of college. Spreading the distributions evenly over all four years could make some families ineligible for need-based aid each year, where using a lump sum in one year may only impact that year.

A Roth IRA provides flexibility. A Roth IRA can also be a good way to save for college as there is much more flexibility for use of the funds. For example, if an only child decides to forgo their college education, the parents may end up paying a 10 percent penalty in addition to income tax when they later withdraw the money. With a Roth IRA, those funds can instead be used as another retirement savings vehicle.

Assets in a Roth are not counted in the FAFSA calculation, which also makes it a good backup plan. If any portion of Roth funds were liquidated, the distribution would be considered parent income on the FAFSA. If income limitations prohibit Roth IRA contributions, work with your financial advisor to consider the potential merits of a Roth conversion. Timing the conversion will also be important as AGI will increase that year as a result. This strategy is best implemented the year before FAFSA-reported income, which would now be three years in advance.

Even for high-income families, college can be a significant expense. As a familys wealth increases, it is still just as important for families who wish to help their children with education expenses to be saving. Start working with a financial advisor when children are young to develop a strategy to save. As with any savings and investment strategy, diversification is the crux of a solid plan.

While 529 plans can offer tax-free growth, investment options and flexibility to use the funds can be limited. Having a plan early for savings, investments, and liquidations can help you find the best path for your family.

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State treasurer holds financial planning presentation

State Treasurer Deb Goldberg last week hosted a presentation, titled #x201c;Preparing for College: Proactive Steps and Financial Resources.#x201d;

#x201c;When I was a child, I had a passbook and regularly made deposits at the bank, Goldberg said. Today banking is all done via ATM or computer, so students do not realize the meaning of savings, because they no longer physically see it in hand. Saving is important for all, whether for a student#x2019;s higher education, for a future home purchase or for a retirement plan. Forty percent of families today do not function with a budget, which makes it even more difficult to begin to save.#x201d;

Jonathan Hughes, of the Massachusetts Educational Financing Authority, discussed how the MEFA website assists families in planning for their children#x2019;s higher education plans with expert guidance. MEFA also provides offers loans to all levels of education.

#x201c;MEFA#x2019;s website allows parents and guardians to begin planning for higher education as early as preschool,#x201d; said Hughes. #x201c;We suggest the U Fund to begin saving as early as possible. College savings should be a part of one#x2019;s regular budget, just like retirement and paying household bills. It is never too early or too late to begin saving for higher education. Saving for college sets children up for future success.#x201d;

Patricia Reilly, director of financial aid for Tufts University, discussed the FAFSA application process. In the event of special financial circumstances, Reilly suggests attaching a one-page letter with the application to explain the issue.

#x201c;Sometimes the higher-priced school might have more endowments and therefore is able to provide more in the way of financial aid than a less expensive college, so don#x2019;t just cross the more expensive one off the list without checking that out,#x201d; she said.

Claire Masinton, of the office of attorney general Maura Healey, discussed for-profit institutions that provide financial aid.

Medford Public Schools Superintendent Roy Belson noted Medford High School offers many Advanced Placement courses, which can help reduce college costs by counting toward undergraduate course credits.

Community colleges are another option for affordable higher education, offering core courses at a reduced cost and allowing students to work while attending school. State colleges also offer reduced tuition rates for resident students.

This presentation was organized by the Medford Public Schools Center for Citizenship and Social Responsibility and the Guidance Department and made possible by a grant from Bloomberg Philanthropies.

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7 Smart Ways to Invest $1000

$1,000 is a great start in one of these plans, and depositing the money in such a plan will help you get the technical details of the account worked out so you can continue to contribute. For example, you might be held back by the fear of the unknown. Making a decision to start saving for college today will make it much easier psychologically to invest tomorrow.

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New Initiative to Give All Children in Salem City a College Savings Account

A new initiative titled the “Acorn Fund,” recently put into effect by the Forman S. Acton Educational Foundation, will make saving for college easier for children of Salem City, NJ The program aims to give every child in Salem City a college fund.

Initially, the Foundation put $275,000 in the fund. This will help almost 1,200 students in pre-K through senior year of high school who will be able to apply for the program in April 2016. All future students in Salem City will be automatically eligible to have a college savings account with their name on it.

The initial “seed deposit” is expected to grow in the coming years as the Foundation will be putting more money in the accounts. It is proven that children with college savings accounts are more likely to attend college and it is the Foundation’s hope that the Acorn Fund will encourage more children in Salem City to seek higher education.

“Like the acorn that became Salem’s famous 600-year-old oak tree, we expect these investments to be the start families need to grow something great,” said Forman Acton Foundation President Kathryn Markovchick.

The Acorn Fund account will also make students eligible for additional scholarships from the New Jersey Higher Education Student Assistance Authority (HESAA). HESAA provides some of the best scholarship opportunities for students planning to attend a college in New Jersey.

Franklin Templeton Investments, the program manager of New Jersey’s college savings program, has put its support in the Acorn Fund. Both parties hope that this fund can be used as a model for other towns and communities to try to do similar programs.

In addition to the Acorn Fund, the foundation has another $622,000 that they expect to give to Salem City students in the form of scholarships and grants.

High achieving students were able to apply for scholarships of up to $10,000 a year for whatever college they want to attend. The scholarship winners for this year will be announced in May.

Families who want to enroll or get more information should contact the Forman S. Acton Educational Foundation directly by e-mail at info@formanscholars.org or by phone at 844-4- FORMAN (436-7626). For more details about this and other foundation programs, visit FormanScholars.org.

Do you have community news or events? Email news@snjtoday.com, text SNJNews to 313131, or call 856.825.NEWS (6397).

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9 Savvy Ways to Build Wealth

While a six-figure inheritance or high-paying job can land you in the top 1% of earners, it’s the little things–your money habits–that often make the difference between a life of prosperity and one of constant financial stress.

Just ask LearnVest Planning Services CFP® David Blaylock, who doesn’t simply advise his clients on the merits of good money habits–he practices what he preaches.

Related: How To Become an Everyday Millionaire…From Those Who’ve Done It

For example, “I do a periodic review of all the subscriptions I have–the ones that hit my credit cards each month,” says Blaylock. “You’d be surprised at how many subscriptions we all have and how many go unused. You could create some significant savings each month just by looking at those things.”

Taking inventory of your recurring subscriptions and services is just one habit that can get you on the road to better fortune.

“If you look at the average amount of money you will earn over your lifetime, and figure out how many years you are working–most people earn more than a million dollars over their working life but very few people become millionaires,” says Nancy Butler, a Certified Financial Planner(TM). “How they manage what goes through their fingers usually makes the difference.”

So what are these easy changes that can help move you further along the road to prosperity? We asked two financial planners for their favorites.

1. Reverse Your Thinking

We know: After taxes are taken out and the bills are paid, your paycheck can seem a little anemic–which can make the idea of having to save for retirement too seem like a real stretch. But to build wealth, a change in mindset is required. Namely, instead of spending the rest of your take-home pay, you’d actually take another cut of your paycheck and put it toward your biggest financial goals.

Related: The American Retirement Crisis in 5 Charts

“Most people spend some money, pay their bills and save what’s left,” says Butler. “And that’s backwards: You should be saving for your financial goals first, paying your bills and and then consider spending the money you have leftover.”  Another trap is putting your good money habits off till “later,” when life will get easier. The thing is, somehow the minute your income increases, the demands on your money seem to as well.

Now, keep in mind, we’re not suggesting you sock all of your money away and live on rice cakes. As Blaylock puts it: “I’m not asking you to put $1,000 away a month, I’m asking you to put away $50, or a small amount that you can afford. We really can’t underestimate the power of starting small, because most of the time that momentum builds, and once we see progress, we tend to repeat behaviors.”

2. Look Where You Want to Go

Just as performance athletes imagine themselves making the shot over and over again–check out this study for how goal setting improves motivation in athletes–knowing what you want your money to do for you gives your goals a better chance of being reached.

To get going on saving for the future, financial experts often suggest having a five-year plan, where you create specific money goals you’d like to achieve in five years and what you need to achieve those goals. For example, saving six months of income for an emergency fund, or saving for a big event, like a down payment on a house.

“Anytime we have a specific goal in mind, that helps us to save,” says Blaylock. “Whether that goal is emergency savings, or saving for a trip, or saving for college, it doesn’t matter.”

3. Adopt Your Own Private Mind Tricks

What if not spending $1,000 on a designer purse or new must-have gadget were as easy as following a rule that dictates you can’t spend more than $300 on something that isn’t essential to your life? The good news is you can create financial rules just like that for yourself; in fact, doing so can be a great habit to get into.

Also known as “heuristics,” these rule-of-thumb strategies we create for ourselves–such as not spending more than $15 on an item of baby clothing, or more than $50 on a pair of shoes–can help simplify the many choices we make in a day. Behavioral economists believe that adopting good heuristics can help one develop good money habits (see this piece for more on how and why they work).

If creating a great heuristic seems like an overwhelming task, Blaylock suggests starting with something simple, such as eating out only twice a week, or “not getting a cart at Target,” a heuristic that helped one of his colleagues save money.

Related: Here’s Why So Many Middle Class Americans Can’t Buy a House

4. Live Like a “Secret” Rich Person

For some, the image of a millionaire conjures visions of sprawling mansions and shiny Bentleys. But most millionaires don’t live large like that–rather, they tend to live well below their “means” and do more saving than spending. In other words, they’re not flashing their money, according to Dr. Thomas J. Stanley, co-author of “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.” Stanley’s book, which details more than two decades worth of surveys and personal interviews with millionaires, reveals that much of the wealth in America is more often the result of hard work, diligent savings, and living below your means.

Las Vegas-based David Sapper, who owns a successful used car business, and his real-estate broker wife make a combined income of $500,000 per year. Yet they live like “secret” rich people, only spending $2,500 per month on all bills and extracurricular expenses like eating out, unlike many of their peers. By putting 90% of his income into savings and investments, Sapper says he’ll be able to retire early.

His advice? “Find the point that you get what you need and you’re happy and comfortable, and just stay there,” says Sapper. “I had an ‘aha!’ moment when I was watching MTV, and LL Cool J was saying, ‘I lease a Honda Accord for $399 a month,’ while other rappers are going broke.”

5. Tackle Retirement Now

If you’re in your twenties or thirties, retirement can seem eons away–and saving for it might not seem like a priority. It’s easy to understand: In between paying to attend weddings (which average something like $600 per guest), saving for a down payment on a home, and using anything leftover to put toward “necessities” like vacation, how are you supposed to save anything for retirement?

Unfortunately the later you start saving, the more you’ll have to save. But the sooner you sock money away, the more time it has to compound and grow.

If, for example, you’re 30 and putting $50 a month into a retirement account with a 7% rate of return, that $50 a month would turn into $56,000 in 30 years, says Blaylock. Should you wait to age 40, you would need to contribute $110 per month to get to that same goal. This is because your money has less time to grow which minimizes the impact of compound interest. (For more on compound interest and why losing time on retirement can hurt you, check out “The Secret of Retirement Savings: You Can’t Make up for Lost Time.”)

6. Know What’s Coming in, and What’s Going Out

Most of us have good intentions when it comes to saving money. But if you don’t know what’s coming into your bank account and what’s going out, chances are you don’t know how much you can devote to your goals. And most people generally don’t track their income and spending, says Blaylock. “It really is shocking to me that clients I work with don’t always review their pay stub,” he says.

Related: The 10 Most Expensive States for Owning a Car

You can track your expenses for free with an app like LearnVest’s that helps you budget, set goals and save. Remember: Knowledge is the first step to lasting change.

“If I don’t know how much you spend on eating out, how can I expect you to change that?” says Blaylock. “You kind of have to become the chief financial officer of your household.”

7. Getting Out of Debt

Everyone has debt at some point in their life. But if you have bad debt–not student loans and mortgages, but credit card debt, where you’re paying high monthly interest rates–nixing it and getting out of the habit of being a debtor should be priority number one. “I want somebody to develop a plan to have them out of that debt in 36 months or less,” says Blaylock. “It’s hindering you from making progress on your other goals.”

At the same time, emergencies happen–and a $600 car repair can hit anytime. That’s why Blaylock advises putting half the money you could put into paying down debt into an emergency savings account. So, for example, instead of paying $600 toward credit card debt, consider putting $300 toward emergency savings and $300 toward credit card payments. While this means it will take longer to get out of credit card debt, you’ll have money stored up for an emergency.

Related: Our 4 Biggest Fears About Paying Taxes

“Credit card debt is a result of the ‘uh-oh’ moments,” says Blaylock. “We still don’t have any savings built up because we put it all toward our credit card. So while you’re also working to pay your credit card down, you should consider putting an equal amount to an emergency savings account. I often tell clients that their emergency savings are their insurance policy against falling into credit card debt ever again.”

After you get out of debt, Butler suggests only having one credit card, and come to an agreement with yourself (or your significant other) that it will only be used during an emergency. “Let’s say the car broke down and you can’t fix it–that’s an emergency,” says Butler. “Something’s on sale, and I know I’m going to need it in six months–that’s not an emergency.”

8. Increasing Your Earnings

There are two ways to increase your net worth: Spend less or save more money. “And spending less is only part of it – you have to save, and when appropriate invest, the rest,” says Natalie Taylor, a CFP® with LearnVest Planning Services.”Earning more often doesn’t lead to higher net worth because lifestyle expenses grow along with it.” 

But if you grow your income, and set some of those earnings aside, you can grow your bottom line. Aside from getting a raise or winning the lottery, there are a few ways to get more money flowing in.

One suggestion: Diversify your income streams by working a second, part-time job doing something you love. As far as earning more, there are a few things one can do. “For those who cannot cut their expenses enough, I love the idea of working part-time,” says Blaylock. “I have a great friend who is an attorney. She has a big travel habit that she is unwilling to pull back on. So, she works at a flower shop on Saturdays during wedding season. It’s a win for everyone: The flower shop has a dependable employee, and my friend loves flowers so she does not think of it as work.”

Another idea: Look for investment opportunities–perhaps with the help of a financial planner–or other ways to get income to come to you. “I think retirement income should come from multiple sources such as rental income, part-time income and retirement assets,” says Blaylock.

9. Consider Consulting an Expert

There are times in life when consulting an expert pays you back in spades. Even if you’re doing everything you can to start good money habits, using a qualifiedfinancial planner can help keep you on track–and help you see the big picture.

“Often times most of us are too emotionally involved in our finances to make really good decisions,” says Blaylock. “So what you’re looking for when you’re getting a professional is accountability and an outside view of what you’re doing. I look at your finances very objectively, where you can’t because you’re that person.”

This article originally appeared on LearnVest. Read more from LearnVest:

How To Budget Your Money With The 50/20/30 Guideline

Ready, Set, Spring Clean! 6 Apps to Turn Clutter Into Cash

Distraction Overload! 7 Ways to Get Back on Track at Work

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Most Treasured Award

It’s award season. And, with the Plan Sponsor of the Year (PSOY) Awards revealed in this issue, we asked NewsDash readers, “What award have you received that you value most?”

More than 96% of respondents received awards for something they accomplished, with the largest group (25%) saying this pertained to work.

For 14.3% who replied, the honor was related to sports and, for another 14.3%, to community efforts. About one-tenth of respondents each mentioned the arts or academics, respectively. The “other” category was chosen by one-quarter, whose write-in answers included recognition for parenting, military service and human resources (HR) work.

More than 55% of responding readers work in a plan sponsor role, 18.5% are advisers/consultants, and 25.9% are third-party administrators (TPAs)/recordkeepers/investment managers. (As always, all verbatim responses reflect the opinions of individual readers and not the stance of PLANSPONSOR and its affiliates at Asset International.)

“Excellence in Leadership Award by members of the Missouri City/County Management Association.”

“My Air Force Commendation Medal. While not an award for valor or heroism in the battlefield, I am very proud of this award as recognition for service to my country with honor and dignity.”

“Recognition for serving on the town finance committee for 30 years and for accomplishments during that time.”

“The award I value the most was for ‘the highest grade-point average for a student working full time.'”

“PSCA [Plan Sponsor Council of America] Signature Award. It was awesome to get recognition and confirmation that we had made significant retirement plan changes for the betterment of our employees.”

“A Silver Quill from the International Association of Business Communicators for EGTRA [Economic Growth Tax Relief Reconciliation Act].”

“Many years ago, my daughter came home from school and gave me a certificate she had made that said, ‘You are the best Dad in the world.'”

Readers also shared what makes awards special, and several expressed dismay at the new trend of giving out “participation” awards.

“Personal Management Merit Badge (required for Eagle Scout Award) included financial planning and budgeting. It opened my eyes to retirement planning and saving for college!”

“There is something wonderful and humbling about being given an award by your peers. These are the people who know exactly the challenges faced and what it takes to do the job well.”

“It’s great to have many alphabets behind your name and accolades from your peers, but the ‘awards’ I treasure the most are the thanks I receive from clients that I’ve helped achieve or work toward their goals.”

“Do participation awards count? I have a garbage bag full of them.”

And the Editor’s Choice goes to the reader who said: “I really think that many people/organizations consider an award as beating out another, when in reality it means that you have achieved something in your quest to reach your goal(s).”

You can participate by subscribing to NewsDash at plansponsor.com/subscribe.

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Saving for College: 529 Plan Investment at an All-Time High

American families have an unprecedented $252.3 billion invested in 529 college savings plans, according to a new report published by the College Savings Plans Network. This represents a growth in assets of $5.3 billion.

The total number of 529 accounts increased almost 4 percent over the past 12 months, from 12.1 million in December 2014 to 12.54 million in December 2015. Contributions last year grew by $25 billion. As of the end of last year, the average balance in a 529 college savings plan account was $20,190, down 1.4 percent from the previous year, which, the report states, is attributable to the performance of the financial markets during the second half of 2015.

Education is second only to hard work as the factor to which Affluent households are most likely to attribute their financial success, Spectrem Group research finds. More than eight-in-10 indicate they believe a college education is necessary to succeed in todays workplace. The Bureau of Labor Statistics reports a 5.9 percent unemployment rate for American high school graduates, but only 2.6 percent for those with at least a bachelors degree.

But saving for college is a challenge, especially among non-Millionaires, 38 percent of whom indicated it was a primary financial concern. Published in-state tuition and fees (including room and board) at public four-year institutions averaged $198.548 in 2015-205 according to College Board data cited in the College Savings Plans Network report.

A 529 college savings plan, named after Section 529 of the Internal Revenue Code of 1986, is a tax-advantaged investment plan created to encourage saving for the college education of a designated beneficiary or any other individual investing for their own higher education. Earnings from the funds are not taxed as long as those funds are used to pay for college expenses. Any family member, including aunts, uncles and grandparents, can contribute to the accounts.

Investment in a 529 college savings plan increases with net worth, according to Spectrem Group research. Eleven percent of non-millionaire households with a net worth of at least $100,000 (not including primary residence) are invested in a 529 college savings plan, compared with 19 percent of Millionaires with a net worth up to $5 million, and one-fourth of Ultra High Net Worth households with a net worth between $5 million and $25 million, according to the Spectrem Group report, Asset Allocation, Portfolios and Primary Providers.

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Whose Gig Is It, Anyway?

Tech Goes Home Chattanooga enables digital literacy countywide

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“We, like all cities and counties, have an issue of a digital divide,” says Kelly McCarthy. “People throw the term around all the time, but I’m not a huge fan of the term.” And while some people dismiss the idea of a digital divide because so many have Internet access on a smart phone, McCarthy says the issue is much deeper than lack of Internet access.

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“Think about everything you do in a day that requires a computer or a smart phone or Internet access, then think about what you would do if you had none of those things every single day of your life,” she says. 

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“Generational poverty, socioeconomic status, educational disadvantages–there are so many things that go into that. You’re not just going to help someone get a computer and Internet access and their whole life is going to change. But you can’t expect their lives to change if they don’t have these things. That’s the reality.”

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Twenty years into the age of Internet it’s difficult, if not impossible, to compete educationally or in the job market if you lack Internet access and the knowledge of how to use the resources you could find there. 

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McCarthy is the program director of Tech Goes Home Chattanooga, a digital literacy program of The Enterprise Center designed to help people in Chattanooga and Hamilton County cross that divide.  They are working to change the lack of access and knowledge by offering a program of hands-on training, subsidizing the cost of a Google Chromebook or iPad mini and helping people understand their options for connectivity.

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 “This is very much a program aimed at people who don’t have any of these things and helping them catch up and move forward,” she says.

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Participants go through a 15-hour course that teaches the basics of how to use the computer by walking them through 25 curated web resources in topics like money management, saving for college, health care, and Internet safety for children. Trainers tailor their instruction to the needs and interests of participants at different sites, serving both children and adults in urban and rural settings. Through a partnership with La Paz de Dios, some classes are taught in English and Spanish. 

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“We’re trying very hard to disperse the sites we work with, because part of the program is about going to people where they are. “

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For many people, there is a psychological barrier to overcome in stepping outside of their comfort zone. That’s why classes offered in churches are some of the most successful.

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“When we started, our first six sites had to take a huge leap of faith because we were brand new,” says McCarthy. “We were saying, ‘you can learn all these great skills, you’re going to become super comfortable using the computer, you’re going to get a brand new computer for $50 and we’ll help you sign up for Internet.’ It sounds too good to be true, I recognized that. We had some very brave souls that tried it.”

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Just over a year later, the program has grown rapidly through word of mouth. The current round of classes, under way at 18 sites throughout Hamilton County, is reaching 335 individuals. So far, 729 individuals in 497 families have been through the program, and 483 subsidized devices (either a Chromebook or an iPad Mini for younger students) have been provided. 

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Plans call for more than doubling those numbers in 2016. Students range in age from 4 to 84. About 72 percent are female, 76 percent are African-American or Latino, nearly 40 percent are unemployed and at least 65 percent earn less than $30,000 per year.

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Tech Goes Home Chattanooga was adapted from a successful program created in Boston. The curriculum is used in other locations around the country, but ours is the first countywide program and the second largest implementation of the program outside Boston, according to McCarthy. 

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For information on volunteering as a teacher or establishing a class site, visit techgoeshomecha.org

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Rich Bailey is a professional writer, editor and (sometimes) PR consultant. He led a project to create Chattanooga’s first civic website in 1995 before even owning a modem. Now he covers Chattanooga technology for The Pulse and blogs about it at CircleChattanooga.com

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