Friday, June 10, 2005

Ways to Pay for College - Scholarship thoughts

Because Tuition for college is climbing so rapidly, I felt compelled to deliver this timely information to parents in the same boat that I am in (kids and future college expenses!).

Tips on landing Scholarships
Start early (real early), be relentless and don't stop looking for free money even if you're already enrolled, and knock on every door

How early do you need to start thinking about financing higher education?
A: Around eighth grade. When you start earlier, you'll find programs for younger kids that have scholarship money attached. For example, you might do a science or history project, send in your results to a group [holding some sort of competition], and get money in the form of a $1,000 U.S. savings bond. But it's never too late to start. Once you get into college, in fact, a whole new class of scholarships becomes available as you choose an academic major or career path.

Q: What can parents of young children do to save for college?A: Over the past decade, the average increase in college costs has averaged around 6% per year. Investing in a 529 college savings plan or the Florida Prepaid Plan are great ways set aside money.

Q: What's the No. 1 piece of advice for financing higher education?A: There are millions of dollars awarded every year from corporations, foundations, associations, industry groups, and individual schools. You need to approach these organizations. It's up to you to find out about all sorts of help -– from the opportunity to earn credits for college by taking certain standardized tests, like Advanced Placement or International Baccalaureate exams, to financial aid offered by individual institutions.

Q: What's the biggest mistake people make in paying for college?A: One huge mistake people make is that they apply for one or two scholarships and then they stop. How many resume's did you send out before you landed your first job out of college? Something to think about.

Q: Is it a myth that you have to be supersmart or athletic to win money for school?A: Many have minimal requirement, 2.75 GPA and once you meet that minimum bar, the judges don't look at your grades at all. So, you could have a 2.76 or a 3.9, and it wouldn't make a difference. Sometimes, students with really high GPAs have trouble filling out scholarship applications because they tend to rely on their scores alone, and that's not enough. Show how you demonstrated leadership within a club, rather than just listing your affiliation. You want to paint a portrait of who you are, not just what you've done. You do that by making your applications intensely personal and as unique as possible. That helps to make an emotional connection with scholarship judges. They award scholarships to people, not to résumés.

Q: What pitfalls should people avoid when taking out loans? A: Most parents and students pick a lender from their college's preferred lender list. Those lenders don't necessarily offer the best deal to students. They're just the ones that are the easiest for the college to manage, because the partnership allows them to process the paperwork more effectively. That's why it pays to shop around for student loans, rather than just picking one from the preferred list. Also, consider a lender that offers repayment benefits. Some lenders will reduce your loan interest rate a point or two after you have made consecutive, on-time payments. Others will reduce it another quarter-point if you agree to make an electronic-funds transfer directly from your bank account each month.

Tuesday, June 07, 2005

Protection from Creditors through IRA Accounts

U.S. Supreme Court Extends Bankruptcy Protection to IRA Accounts
Employee IRA accounts are safe from creditors! The Court ruled that an individual's IRA account balances are safe from the claims of creditors in bankruptcy. The ruling makes it clear that balances in any retirement plan that restricts access to payments with plan provisions governed by ERISA, or just an early withdrawal penalty, are protected whether the plan is an ERISA plan or an IRA.

10% Penalty on Early withdrawal has a Silver Lining
Basis for the Court's Decision is that dreaded 10% penalty incurred if funds are withdrawn before age 59%. The Court stated that 10% is a lot! Since the 10% "restriction" is removed when the individual reaches age 59 ½, the right to payment is a right to payment "on account of age," and the fund is protected, not by the anti-alienation provision of ERISA, but by the Bankruptcy Code itself.

That analysis is supported by:
-A requirement that distributions must begin no later then the year after the year in which the IRA owner turns 70 ½
-IRA accounts are not taxed until money is distributed
-withdrawals before age 59 ½ are subject to a 10% penalty

Friday, June 03, 2005

Getting ready for the Hurricane Season!

Remember last years Hurricanes?
Twelve days of sales-tax free hurricane supplies is under way. Businesses have altered their computers - starting today - to waive sales tax on many hurricane supplies and welcome those customers who want to save some cash on certain supplies.
"While supplies of all things hurricane-related have been popular since last year's nasty storm season, 12 days of no sales tax on related items could be a bigger boost to local sales," said Karen Cobb, spokeswoman for Lowe's Home Improvement.
Hurricane related items will be covered during the tax holiday, which runs through June 12.
Cobb said the memory of last year's hurricanes is so fresh that generators have already been selling well.
"But we still feel that the awareness of being properly prepared for the season, coupled with the tax-free holiday, will help us to achieve strong and consistent sales all year long," Cobb said.
Keith Phillips, assistant store manager at Lowe's in East Manatee, said his store has already sold several generators.
"We have been busy and generator sales are leading the pack," he said.
The sales tax holiday has Lowe's sponsoring how-to-clinics every day at 11 a.m. on four subjects: generator safety, installing hurricane shutters, boarding up windows and chain saw safety.
"It's one thing to purchase these items with no sales tax, but it's another to go out and use them properly," Cobb said.
When the clocks struck midnight, Florida stores implemented new programming for their computers and registers to knock off the sales tax on the items specified by Gov. Jeb Bush and the state Legislature.
Don Harrison, spokesman for Home Depot, said the company's software and technology department handled the price adjustments from the company's headquarters in Atlanta.
"It's an easy adjustment that we were ready for," Harrison said. "Price changes are automatically fixed when needed for all of our stores."
Also Tuesday, the chain announced plans to reduce prices on affected items by 7.5 percent, which is the maximum sales tax that can be charged by Florida counties. Manatee County's sales tax is 6.5 percent, meaning the additional cut amounts to a 14 percent savings. In Sarasota County, where sales tax is 7 percent, the cuts total 14.5 percent.
Brian Piech, store manager at Crowder Bros. Ace Hardware on Manatee Avenue West, said his store spent extra time identifying and flagging nontaxable items Thursday night.
"We are prepared with additional merchandise," Piech said. "The computers are ready and it will be interesting to see what happens in terms of sales in the coming days."

Grocers react-
"We are fully stocked to for this tax holiday and hope people take advantage of it," said Sweetbay and Kash n' Karry spokeswoman Nicole LeBeau.
Dick Gulash, store manager at Albertsons on Manatee Avenue West, said his store spent several hours checking the prices of related items Thursday.
"It's like putting a discount in the system or changing advertisements on certain items," Gulash said.

Grocer trying to rebound from bankruptcy gets ready for the season.
Terry Derreberry, neighborhood marketing manager for Winn-Dixie Stores, said customers are more aware of what you need to prepare for a storm.
"We have learned you need to prepare for the worst, but hope for the best," Derreberry said. "Both Winn-Dixie and our customers have taken that motto to heart."