Avoid This Mistake When Making IRA Contributions

 

IRAs are the cornerstone of most people’s long-term retirement plans. In the best of circumstances, they offer tax-deferred growth and either tax-free distributions at retirement or a major tax-deduction when contributions are made.

Savvy investors fund their IRAs to the maximum amount allowed by the IRS. However, if you are not careful, it’s actually possible to OVER fund your IRA.

Known as an “excess contribution”, adding too much to your IRA could result in significant penalties and quite a mess to untangle.

Below are 5 ways you can end up with an excess IRA contribution. 

These 5 Assets Are Exempt on the FAFSA Form

5th in a series

Starting as early as October 1, families with kids going to college can complete the Free Application for Federal Student Aid, aka the FAFSA form.

The FAFSA requires students and their parents to provide information about their income and assets in order to determine what is called the Expected Family Contribution or EFC. More specifically, the FAFSA wants to know about your income from the previous tax year (2017, if you complete the FAFSA for the 2018-2019 school year), and the value of your assets as of the day you fill out the form.

With smart planning families can complete the FAFSA in a way that maximizes their opportunities to receive need-based financial aid for college. Since the FAFSA asks about the value of your assets on the day you fill out the form, the time to reposition assets and implement your plan to pay less for college starts before you complete the FAFSA.

The following 5 assets are exempt on the FAFSA and are not counted in the EFC calculation.

Visit Over 400 Colleges Without Leaving Town

4th in a series

 

The National Association of College Admissions Counselors hosts a major college fair in the Twin Cities each year. This year’s fair is October 24th and 25th at the Minneapolis Convention Center.

With over 5,000 colleges and universities in the United States odds are good that 90% of them are schools you have never heard of before. The Minnesota NACAC College Fair offers students and their parents a unique opportunity to talk to representatives of many of these schools as well as many others that are more familiar to Minnesota families.

It’s free and open to the public. You can register online here

Filing Your FAFSA Form Online? There’s An App For That.

3rd in a series

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Today I’m featuring a guest post by Jeannie Burlowski, author of the book LAUNCH: How to Get Your Kids Through College Debt-Free and Into Jobs They Love Afterward. You can see over 50 reviews of LAUNCH here.

Are you parenting a student of any age who’ll be in college next fall? If so, one of your most important tasks this year will be to fill out the Free Application for Federal Student Aid (FAFSA) as soon after October 1st as possible. This applies to every student and every parent—no exceptions.

Are you convinced that for you, filling out the FAFSA will be a waste of time—because you make far too much money to qualify for any college aid? Check out this article on 7 Reasons to Fill Out FAFSA Even if You’re Rich.

And then get out your smartphone.

As of October 1st, 2018, you can fill out the FAFSA on your phone.

For years, students and parents filling out the FAFSA were required to complete the form using desktop computers. In 2018, though, a new, mobile-friendly version of FAFSA was released.

Here, 8 things you’ll need to know before you fill out the FAFSA on your phone.

A Cautionary Tale About Student Loan Debt

Second in a series

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Every fall I do college planning workshops for parents of college-bound high school students to help them pay less for college. My goal is to give them the tools and information they need to become smarter consumers of a college education so they can make better choices for themselves and their kids.

After one of my presentations a woman came up to me and told me that she wished someone had giver her or her parents this information when she was in school. She went on to say that even as her daughter was about to graduate from high school she was still struggling to pay off her own student loan debt.

Suddenly, the concept of student loan debt became very real, very fast.