Summer will officially be here soon, but before kids get out of school and all the vacation planning you did begins to come to fruition, it can be a good idea to take stock of your financial picture and make updates where necessary. Below are a few things you should consider to keep your plan in shape. We’ve organized them by life stage, from having small kids to being closer to retirement. We’ve also included charitable giving, as that happens at every stage.
Having outstanding student loans at the age of 50 versus earlier in your career will have a very different impact on your financial status. In today’s episode, we have a distinguished guest who specializes in helping people over the age of 50 to repay their student loans. Erik Kroll, Certified Financial Planner® and the owner of studentloansover50.com joins us to explain different strategies to manage your student loans, as well as how that approach changes with time.
[02:02] Student Loans Over 50 – We start the conversation with a brief review of Erik’s background, the work he’s doing as a financial planner, and what lead him into specializing in student loans.
[04:45] Age and Student Loans – The differences between having student loans as a fresh graduate versus having student loans at the age of 50 and how our life priorities in come into play.
[08:28] Forgiveness – Erik dives into important considerations for student loan forgiveness, including different options, qualification criteria, and taxation.
[15:12] Accumulating Debt – Common patterns for individuals over 50 with student loans, including Parent Plus loans, post-graduate education, and career changes.
[22:03] Double Consolidation – Erik explains the process of utilizing consolidation and other strategies to reduce monthly loan payments.
[29:10] Rehabilitation – The path to rehabilitation and qualifying for forgiveness after your loans have gone to debt collection.
[34:18] Student Loans Over 50 Playbook – Erik shares his thoughts on what led him to create his eBook and what readers can learn from it.
[37:11] Recent Developments – Erik shares his take on some of President Joe Biden’s recently proposed loan forgiveness provisions.
[41:07] Private Loans – The pros and cons to a private refinance, and important things to consider when making this decision.
Connect with Erik:
Past episodes on Student Loans:
Episode #34: Why College Is So Expensive & How to Pay For It With Robert Farrington
Episode #90: This is Exactly What to Do With Your Student Loans
With roughly 44 million borrowers that collectively owe nearly $1.7 trillion, student loans, the second-highest consumer debt category, has become something that’s pervasive for young people in the United States. We dedicated this episode to exploring some of the ways borrowers can make their student loan repayment manageable. Throughout the episode, Grant dives into how the interest rates and other characteristics vary depending on the lender, repayment options, income-based repayment, federal student loan forgiveness, and more. Stay tuned until the end of the episode, where Grant shares some strategies to reduce your monthly payments by suppressing your adjusted gross income.
[01:43] Background – The pervasive nature of the U.S. student loan programs and why they have become pervasive.
[05:10] Who Lent You the Money – Grant explains how the interest rates and repayment options may vary depending on the institution that is underwriting a student loan.
[07:38] Repayment & Refinancing – Once students have graduated and their forbearance period has finished, it’s time to paying back the student loans. Grant explores some of the options available for students at this point and how to decide whether to refinance with a private lender.
[10:19] Staying in the Federal System – Although it might make sense in some cases to refinance with a private lender, staying in the federal system has its own benefits. We talk about what these benefits are and how students can take advantage of staying in the federal system.
[13:07] Income-based Repayment – How the income-based repayment programs work, requirements for eligibility, and how they help people make their monthly payments manageable.
[18:13] Forgiveness – One of the features in income based-repayment is being able to get your debt forgiven after a certain number of years. Grant dives deep into how debt forgiveness works, how taxation comes into play at the point when the debt is forgiven, and what to consider when deciding whether to pursue forgiveness.
[22:32] Administrative Forbearance – As a part of the stimulus package introduced under the CARES Act, an additional forbearance period was introduced for student loans. Grant shares his thoughts on how to take this into consideration when making decisions about student loan repayment.
[27:15] Strategy for the Federal System – Grant shares some strategies for those who are in the federal system to make loan payments manageable by suppressing their adjusted gross income.
Episode #34: Why College Is So Expensive & How to Pay For It With Robert Farrington:
This week on Grow Money Business we talk about a powerful long-term tax planning opportunity available to business owners. Employing your kids in your business gives you and your kids numerous benefits in terms of taxation and retirement savings. Throughout this episode, Grant dives into what these benefits are, how you can contribute to your kids’ retirement savings, and some tax planning opportunities related to employing your kids.
We’re planning to post another mailbag episode in the next few weeks. If you have specific questions you’d like Grant to answer in an upcoming episode, visit growmoneybusiness.com, and drop your questions in the Mailbag section.Continue reading
This week on the Grow Money Business podcast we have another mailbag episode. Grant covers four questions from our listeners about Social Security benefits, the future of value investing, distribution strategies for retirement, and saving for your kids’ higher education.
If you have more questions you’d like us to cover, visit growmoneybusiness.com, and drop your questions in the Mailbag section. Grant will answer your questions in a future episode.
Many people I work with realize that they need some kind of life insurance once they start having kids. The purpose of life insurance, of course, is to ensure that everyone in your household can maintain their standard of living if you die prematurely. And as soon as other people start relying on income you haven’t earned yet to live, it’s probably time to consider some coverage.
The problem seems straight forward, but the options are confusing. First, there’s more than one type of life insurance. Whole, variable, universal, and term are the predominant options available. While insurance agents love to sell the first three (because they’re the most profitable to the insurance company, and therefore pay the greatest commissions) term is the least expensive and usually the best fit.
I’ve written in the past about why most people seeking life insurance should steer clear of permanent insurance policies. But what about the second part of the equation: how much do you really need?
There are two predominant ways to figure this out: human life value and a life insurance needs analysis. Today’s post will explore both methods.
Believe it or not, we’re already in “back to school” season. And to continue our recent series of posts on paying for college, today’s covers a question I’m sure will resonate with many readers:
Should you raid your 401k to pay for your kids’ college?
There are a lot of moving parts to this question. First, can you even get money out of your 401k to pay for college costs? Are there early withdrawal penalties for doing so? And aside from the logistics, is it even a good idea to? This post will cover whether it’s possible…and whether you should.
If you’re in a position to put some money away for your childrens’ future college costs, a 529 plan is typically the most popular home for your savings. There are some tax advantages, you could get a deduction on your state’s income taxes, and heck, the accounts were created for college savings. But the knock on 529 plans is that they can be inflexible. Take money out for anything other than qualified educational expenses and you’re probably looking at a 10% penalty on the account’s earnings.
As an alternative, some people prefer to use a Roth IRA for college savings instead. You get great tax benefits, and many people don’t realize that you can withdraw funds before retirement age penalty free if they’re used for qualified educational expenses. So given the limitations of 529 plans, are Roth IRAs really a superior vehicle for college savings?
If you’re a parent, I’m guessing that at some point you’ve
freaked out thought about the cost of your child’s future college tuition. College costs are rising about 7% per year here in the U.S., and don’t look to be slowing down any time soon. Most conventional advice we hear about ways to afford college costs has to do with starting to save early, or scouring the earth for potential scholarships. What many of us forget is that we already have saving opportunities build into our tax code, in the form of a college tuition tax credit.