The theme this week on the One Minute Retirement Tip podcast is: grandparent-owned 529 college savings plans. 

Today, I’m talking about the new rule for grandparent-owned 529 college savings plans that just made these plans more appealing for grandparents in 2021. 

As I talked about yesterday, grandparent-owned 529 plans used to be problematic because distributions from 529s could have a big impact on financial aid, reducing the amount by as much as 50% of the amount of support provided. So if you contributed $20,000 from a 529 that year to help pay for college, that would reduce the student’s aid eligibility by ½ of that amount, or $10,000 in this case. 

But the new Free Application for Federal Student Aid form, aka the FAFSA form, just had ⅔ of the questions removed, including the one that asked about cash gifts from grandparents. So now, starting in 2021 grandparents no longer have to worry about 529 plan distributions or any other support for their grandkids attending college impacting their eligibility for financial aid. 

So if you’ve heard in the past that grandparent owned 529 plans are a bad idea, think again. The new changes to the FAFSA just made them a lot more appealing, especially for students who will still require some financial aid to help pay for college. 

That’s it for today! Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: grandparent-owned 529 college savings plans. 

Today, I’m talking about grandparent-owned 529 plans and financial aid for college, and the historical challenges that made these accounts less appealing for grandparents to own on behalf of their grandchildren. 

That’s all changed now, but you may have heard that grandparent-owned 529 plans are a bad idea. That’s because money paid out from grandparent-owned 529 plans used to impact financial aid eligibility. A withdrawal from a grandparent-owned 529 account to pay for college could have reduced that student’s financial aid by 50% of the distribution amount. So if you used $20,000 from the 529 account to pay for college that year, financial aid amount would be reduced by half of that amount, or $10,000. Why? Because the withdrawal counted as untaxed income to the student and would show up the next time the FAFSA was filed for financial aid. 

That wasn’t the case for parent owned 529 plans which were included as an asset on the FAFSA and were treated differently as a result. So grandparents had to get creative if the grandchild was applying for financial aid. This often involved waiting to disperse the funds from 529 plans until later in college years, or changing the account owner to the parent, but there were some potential tax consequences for that. 

The point here is that you may have heard that grandparent-owned 529 plans were a bad idea. That’s not true, but the rules were clunky and unfair and they just changed this year...I’ll talk more about that tomorrow. 

That’s it for today! Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: grandparent-owned 529 college savings plans. 

Today, I’m talking about 6 big benefits of the grandparent-owned 529 plan: 

• More experienced investors, 
• more funds to contribute, 
• legacy goals of helping a grandchild fund their education that may not be as important to parents 
• control over how the account is invested 
• can change beneficiaries to another grandchild if that child doesn’t go to college - more options than most parents - esp if you have 10 grandchildren 
• Estate planning benefits with superfunding

That’s it for today! Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: grandparent-owned 529 college savings plans. 

Today, I’m talking about grandparent-owned vs. parent-owned 529 plans. A good place to start with explaining the important differences between the 2 is to look at how these accounts are set up. When you set up a 529 college savings plan, there is an account owner and a beneficiary. The 529 plans that I have for my kids are titled with my name, then for the benefit of...my child. I have one set up for each of my children. 

The 529 plans for my kids are set up as parent-owned 529 plans. Most of the 529 plans that I see are parent-owned, but I think grandparents miss an important opportunity to help support their grandchildren pay for college if they don’t establish a grandparent-owned 529 plan for their grandchildren. 

Tomorrow, I am going to dive into 6 big benefits of the grandparent owned 529 plan, but for today, I just want to explain the primary difference between the 2 accounts. There used to be more differences in how parent vs. grandparent owned 529 plans were used for determining financial aid eligibility, but some recent law changes leveled the playing field making 529 plans more attractive for grandparents to own. 

A blog post by Wayne Johnson summarizes this best: “as account owner, a grandparent can retain some measure of control over his or her contributions by changing investment selections, authorizing account withdrawals for both education and non-education purposes, or even closing the account. A grandparent will have this control over these contributions even though they generally aren’t considered part of his or her estate for tax purposes — a rare advantage in the estate planning world.” 

That’s a pretty compelling reason to consider opening a grandparent-owned 529 plan. But just remember, the only difference is the account owner, which trickles down to control over investments, withdrawals, & changing beneficiaries. 

That’s it for today! Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: grandparent-owned 529 college savings plans. 

Today, I’m talking about the basics of 529 plans so you understand the benefits of these plans and why you may want to contribute them as a way to save for college. 

College is expensive, and if you pay attention to the news there are a constant stream of stories about mounting student loan debt, defaults, and the ever-increasing cost of college that make it much harder for young adults entering the workforce after college to buy a house and save for retirement, because they’re saddled with lots of debt. 

To avoid burdening their children and grandchildren with student loans that can take years and even decades to pay off, many parents and grandparents want to help pay for college. Enter the 529 college savings plan. 

A 529 plan is a type of account where the money inside is earmarked for college expenses - this can be tuition, room and board, and other college costs. The types of educational expenses that 529 plans can be used for are actually quite broad, but the important thing to remember is that the money is meant to be used for education expenses. If it’s used for something else, you’ll get taxed and penalized. 

With that in mind, here are the 2 most important basics you should know about a 529 college savings plan. 

• High contribution limits. You can contribute up to $15,000 into a 529 plan in 2021 per beneficiary, and twice that if you’re married. That means that if you’re married and you have 3 grandchildren, you can save up to $90,000 this year for your grandkids college - $30,000 for each grandchild. 

You can actually contribute more than this by making a lump-sum contribution to the 529 plan - it’s known as superfunding a 529 plan, but you’ll want to do your homework so you don’t make any tax blunders or miss opportunities to max out your 529 contributions. 

High contribution limits are great for estate planning purposes, gifting to your grandchildren in a tax-efficient way, and making up for lost time if you’re starting a 529 plan in the middle school or high school years. 

• Tax-free growth. Another important characteristic of 529 plans is that once the money is inside the 529 plan, the money can grow tax free, and as long as the funds in the 529 are used for qualified education expenses, there is no tax when you take the money out. The sooner you establish and fund the 529 in the child’s life, the more time is on your side to have the money grow tax-free, and the less you’ll have to contribute to the plan in the long-run.

Those are the 2 most important features to know about the 529 plan. There are several other important features to know about 529 plans - like anyone can contribute to these plans, and they’re highly flexible - so even if the beneficiary doesn’t go to college you can still use the funds for something else or someone else in the future. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week and a new theme here on the One Minute Retirement Tip Podcast. I’m your host Ashley Micciche, CEO and co-owner of True North Retirement Advisors, an independent advisory firm managing $300 million in client assets. I’m a Chartered Retirement Planning Counselor, a frequent speaker, radio and podcast guest, and I love talking to anyone who will listen about making a plan for the retirement you deserve, including you, my beloved listeners. 

The theme this week on the One Minute Retirement Tip podcast is: Grandparent-owned 529 plans

There are some recent rule changes that just made grand-nt-owned 529 plans more attractive for grandparents to help save for their grandkids’ college, and make this week’s theme very timely - especially if you have grandkids who are babies all the way up to pre-teen. 

So this week on the One Minute Retirement Tip podcast, I’m going to dive into 529 college savings plans and what you need to know as a grandparent if you want to help fund your grandkids college. 

Which I might add is a very noble and common goal. It’s an amazing way to help your loved ones avoid the burden of student loans and get them off to a great start in adulthood with a quality education. Helping to pay for grandkids college is a common goal among my clients. Your children and grandchildren will no doubt appreciate not starting life burdened with massive student loans, and your gift will pay off in often unexpected ways throughout their life. 

I’ll talk about the basics of 529 plans, the differences between parent-owned and grandparent-owned 529 college savings plans, 6 big benefits of grandparent-owned 529 plans, and importantly...the new rule that just made grandparent-owned 529 plans more attractive than ever. 

I look forward to spending this week with you learning more about 529 plans, and I hope you’ll come back tomorrow where I’m going to lay the groundwork for the rest of the week by talking about 529 basics and what makes these investment accounts such a powerful tool for saving for the ever-increasing cost of college. 

That’s it for today. Thanks for listening! My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...It’s recap time! 

The theme this week on the One Minute Retirement Tip podcast is: the problem with financial experts.

Here’s what we covered in each episode this week: 

• The problem with the big financial institution bigwigs, which is that their advice is often just too watered down
• Then we talked about the question you should always ask, which is what is this person trying to sell me. It’s always something, and it could be as simple as wanting you to spend more time watching their show or their videos. There is always an agenda, which doesn’t mean that you should dismiss everything you hear, it just means you need to be guarded and discerning in accepting the advice that’s doled out. 
• After that, we talked about personal finance red flags - the use of the words never and always. Personal finance is so gray, that in your situations and circumstances, you may want to do the thing that you’re never supposed to do, or you may not be better off doing the thing that you’re told you should always do. 
• Then, over the last 2 days, I talked about how classic personal finance books are my favorite place to consume financial information, and how you need at least one competent, trustworthy, and most importantly, accountable person to get your advice from. 

Hopefully after listening to the tips this week, you have better tools for being discriminating in how you consume financial media and the advice from experts. 

If you missed any of these episodes, you can find them on Apple Podcasts or wherever you listen to podcasts by searching for the “One Minute Retirement Tip with Ashley”. 

Tomorrow, come on back, because we’re starting a brand new theme: grandparent owned 529s  the new rule you need to know. I’ll talk about a recent change to the laws for 529 college savings plans that make them more attractive to open and fund if you’re a grandparent. Help those favorite rugrats of yours pay for a 6-figure college bill. I’ll share with you this new rule and how to take advantage of it next week. 

Thank you so much for listening this week! My name is Ashley Micciche and I hope you have a blessed Sunday.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: the problem with financial experts.

One of the main problems with financial experts that I haven’t yet discussed this week is that there is no accountability for their bad advice. What do they care if you sold your entire 401k to buy GameStop stock at the top? There is no connection between their bad advice and the consequences of that advice. They’ll never even know that you took their bad advice and blew up your future with it. 

So the best place to get your financial advice then is where there is accountability. And that’s what I’m talking about in today’s episode - the best place to get your financial advice. 

And that’s me! 

You can take advice and recommendations for someone who doesn’t know you and isn’t accountable to their bad advice, but only after you run it through the filter of another trusted person. 

This could be your actual financial advisor. If you have one who is competent, who knows you, and who you trust, that should be your first phone call or email when you want to take action on any harebrained ideas you got while watching late night TV.

If you don’t have a financial advisor, maybe you have someone else in your life who is qualified and competent and who knows you. Maybe your friends with an advisor or your best friend is pretty savvy with these kinds of things. Taking financial advice from other people is not recommended, because most people are clueless of all the unintended consequences of their advice, but they’re happy to give it out anyways. But, most of us have at least one people in our lives who is competent, trustworthy, and accountable to the advice they give to you. 

That’s it for today. Tomorrow, we’re going to recap the week and I’m going to give you a little preview of next week’s theme. 

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: the problem with financial experts.

So far this week I’ve been talking about the problems with the financial experts and why you should generally not take advice from people you see on TV. That advice usually carries an agenda with it and more often than not it’s either too biased or too watered down to be useful. 

Today, I’m turning to my favorite trusted resources for financial advice...and that’s books. If you take nothing else away from this week’s episodes, I hope it’s to read more and watch less TV if you want to improve your finances and make better decisions about money.

There are so many great personal finance books out there, so it’s impossible to list them here, but I would encourage you to start where you are most interested or where you need the most help. 

If you have too much debt, then I recommend “Total Money Makeover” by Dave Ramsey. If you struggle with materialism and keeping up with the Joneses, then “The Millionaire Next Door” is the book for you. My dad recently gifted me “The Psychology of Money” by Morgan Housel, a book containing timeless lessons on wealth, greed, and happiness. I’m looking forward to diving into that one. 

If you stick with the personal finance classics, you’ll be able to use those finance experts to your advantage and level-up your knowledge and confidence with your money. 

That’s it for today. But in case you missed this week’s earlier episodes, I’m planning an upcoming weekly theme on the podcast of “ask me anything”! Questions about your retirement, inflation, can you afford to retire this year, should you pay off your house before retirement...whatever is weighing on your mind about your money right now, submit your question to me, I’ll pick 5 of my favorites, and answer them on the podcast. Just send me an email to [email protected].

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: the problem with financial experts.

Today, I’m talking about 2 words in financial advice that are red flags to watch for if you’re going to take advice from someone in the media or something you watched on YouTube. Those 2 red flags are “never” and “always”. In the world of financial advice, watch out for never and always. 

2 extremes that in the world of financial advice usually don’t apply. Always save at least 10% of your income. Never use credit cards. These are common pieces of advice, and I could list many more just like it, but in the world of financial advice, there is always a gray area. Never buy whole life insurance. Always wait as long as possible to start social security. 

These statements may be true for some people, but they’re certainly not true for everyone, and I can provide several scenarios for each of those examples above why you would want to save less than 10% of your income, why you should use your credit cards, buy whole life insurance, and start social security as soon as possible. 

My point here is that the advice giver usually sounds very confident in their opinion, they’re usually angry at the other side (those crooked insurance salesman trying to sell you whole life), but that in itself is a sales tactic. If you can whip people into a frenzy and get them to think that you’re fighting for them, watching out for them, protecting them from the big, bad enemy, it’s a powerful and proven sales tactic. 

Hitler did this quite well with devastating consequences. 

So be careful about blanket financial advice that contains the red flag words always and never. It’s never that simple because there’s always a gray area when it comes to financial matters. 

That’s it for today, but before you go, I’m planning an upcoming weekly theme on the podcast of “ask me anything”! What’s weighing most heavily on your mind right now as you approach retirement? Submit your question to me, I’ll pick 5 of my favorites, and answer them on the podcast. Just send me an email to [email protected]. That’s [email protected], and even if I don’t pick your question to answer on the podcast, I’ll do my best to reply and send you an answer anyway.

Thanks for listening! 

My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance