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Helping your children or grandchildren with college expenses can be one of the greatest gifts you’ll ever give. But as college costs continue to soar, early preparation is critical. By choosing a college planning strategy, you can make an investment in your future student that will last them a lifetime.

It starts at the baby shower…Comments about the cost of college can overwhelm new parents. Amidst sleep deprivation and drastic life changes, it’s easy to forgo college planning. Diapers, formula and child care are expensive priorities. For stay-at-home moms or dads, there are new struggles as the family adjusts to a single income.

Yet, many parents recognize higher education is critical. With college costs on the rise, more and more young adults are graduating with significant debt or abandoning higher learning all together.

Every family has to determine what works best for it when it comes to saving for college, but it’s well known that even small contributions and continuous savings can make a difference. Depending upon the plan, funds can grow over time and what may seem insignificant today could make a big impact tomorrow. There are many different ways to save. By educating yourself on the options, you can decide what makes sense for your family in the short term and what can give you a financial advantage in the long run.

529 Savings Plans

Designed for college saving, these plans are generally operated by states or educational institutions. A 529 Plan can be opened at any time and kept until needed. You can open a 529 Plan in any state, depending on the requirements, but the funds must be used for qualified education expenses or there’s a tax penalty upon withdrawal. The big potential benefit is that savings grow tax-deferred, and when needed, the funds can be withdrawn tax-free so long as they are used to pay for qualified education expenses. A 529 Plan is owned by the purchaser for the benefit of the beneficiary. If that beneficiary ultimately decides not to go to school, another beneficiary can be selected.

It is important to know that there are two general types of 529 plans, college savings plans and prepaid tuition plans. Research how each works and then decide which may be a better fit for your family. (Related: Getting the Most Out of Your 529 Plan)

Savings Strategies

Saving for college is a selfless act. It begins with looking at your spending habits and identifying where you can cut back. Look for judicious spending and allocate funds differently. We love our children and we want to support their dreams and interests but being cognizant of extracurricular spending may allow for more contributions to be put away. Many 529 Plans have a minimum contribution limit such as $50. By starting small and opting for monthly, automatic contributions you can start to build college savings into your budget.

The good news about day care costs is the expense may decrease as an infant grows to a toddler and then goes on to elementary school. While it’s tempting to tap these funds for current needs, consider adding your newly found “raise” to your child’s college savings.

If you are fortunate to receive annual bonuses or other unexpected income sources such as a tax return, set aside some of it toward your 529 to boost investment. It's important to regularly analyze how you're dividing your savings budget throughout your portfolio of investments.

If you pick a monthly dollar amount and stick to it, savings calculators can help you estimate what your savings might be. For example, if you start a 529 Plan with $1,000 and contribute $100/month over 18 years, your contributions would add up to $22,600, assuming no growth rate of return. Try our 529 calculator and test some contribution values and results.

Friends and Family

529 Plans offer easy ways for family and friends to join your savings efforts. Anyone can make a contribution to your child’s 529 Plan. Considering how quickly kids outgrow clothes and toys don’t be afraid to share your long-term goals particularly around holidays and birthdays. Start early. The opportunity for compound interest can be a a valuable gift. By contributing sooner, rather than later, the money in a 529 Plan generally has more time for potential growth and to ride out any market downturns.

Loans and Late Saving Strategies

It's never too early, or too late, to start saving. A lot of parents begin to save when their children are in middle school. Money market accounts and CDs can help increase short-term savings, but a few other strategies can also help maximize your college savings dollars.

For example, if you own a whole life policy, it may provide some added benefits beyond the death benefit. When applying for financial aid, a portion of the funds in a 529 Plan is often considered before a financial award is determined--but life insurance is not. Parents may still be able to take a loan from their whole life policy for a child's education. 1

Educational loans can also be options for some families. What you want to stay away from is tapping into your retirement to pay for college. Relying on your retirement funds to pay for your child’s education can significantly impact your ability to retire, or the ultimate timing of your retirement. (Related: Paying for College via Direct Loan)

Additional savings options may also be available. For example, supplemental shopping reward programs like UPromise can help defray the costs of education by allowing you to earn funds that can help support the cost of education. In addition, the SmarterBucks app can help with student loan debt by earning credit on routine purchases. Both programs feature a healthy list of major retailers and allow you to enlist family and friends to share their shopping rewards with your student. For more detailed information and requirements about these programs, you should check with the program directly.

There are many college savings options for you and your family. Be sure to consider the best possibilities to meet your needs in the short- and long-term.

Plans allow contributions to a state sponsored plan for higher education expenses. Owner may change the beneficiary of the account to another eligible family member of the original beneficiary. Section 529 plans are authorized under IRC § 529 and are sponsored by the individual states. Some states may offer preferential state tax treatment if certain conditions are met. Contributions grow tax-deferred and qualified withdrawals are federal income tax-free. Gifts to a 529 plan qualify for the annual gift tax exclusion. Annual exclusion gifts to a 529 plan can also be front-loaded for a period up to five years. Taxable withdrawals may avoid the additional 10% penalty tax if they occur on account of death, disability or receipt of a scholarship.


When you think about retirement, you may picture yourself enjoying hobbies, doing volunteer work or launching a second career. By planning for the next chapter of your life, your wishes can become a reality. Whether you’re right on track or even if you need to catch up, there are tools and services that can help you meet your goals and retire on your own terms.

Retirement is typically one of the top financial goals you’ll be working toward. It may be the furthest out, but any good financial plan starts with calculating how much money you’ll need to live on during your retirement years, putting a strategy in place to get there, and then addressing your shorter term needs.

Many financial professionals believe you’ll need approximately 80 percent of your peak pre-retirement income to maintain your current lifestyle in retirement.

If your peak income is, for simplicity, let’s say $100,000, then you may need $80,000 or more each year. Multiply that annual figure by your expected years in retirement and that’s your target. Given today’s longer life expectancies, you could be nearing the $1.5–$2 million range. Don’t let those numbers scare you. Again, everyone is different. Maybe you’re accustomed to living on $40,000 per year, in which case your goal is roughly $32,000 times your retirement years. That’s a big difference.*

*This hypothetical example is used for illustrative purposes only and does not represent any specific investment

Envision the Retirement You Want

Another factor in figuring out how much income you will need in retirement is envisioning how you want to spend your retirement years.

Do you want to travel? Own a second home? Leave a legacy to your family, charity or alma mater? Or maybe you just want to live a simple lifestyle with the primary goal being to cover your basic expenses. Now’s your time to think through the world of possibilities, because the sooner you start planning — and saving — the better able you are to reach your retirement money and savings goal.

Time Is Your Friend When Saving for Retirement

Setting aside even a small amount of money each month can add up over time. One common and effective strategy is to use traditional retirement vehicles, such as an employee-sponsored 401(k) or Individual Retirement Account (IRA), and set up automatic contributions. While each of these types of retirement accounts has unique rules, all offer tax benefits that can add up over the long-term. Even if nearing retirement, it’s not too late. If you are 50 or older, “catch-up contributions” help pre-retirees stash even more money into their 401(k) or IRA than the basic contribution limits each year.

How Should You Allocate Your Money?

How you decide to allocate the money you've accumulated — and the goal-related products you choose — are probably the most critical factors when it comes to creating a retirement plan. As mentioned, there are IRAs for retirement goals, as well as guaranteed lifetime income products, but depending on your life stage you may want to consider other solutions as well.

Diversification Helps Balance Risk

Diversification can be summed up in one phrase: Don’t put all of your eggs in one basket. Regardless of what types of retirement product solutions you choose to buy, don't bet your retirement nest egg on just one. The types of products you select will vary depending on several factors, including your risk tolerance and retirement time horizon. These two factors work hand in hand. The more years you have left until retirement, the higher your risk tolerance may be.

When it’s time to determine the products and financial strategy that’s best for you, you may want to consult with a financial professional who can help you map out a plan. In the meantime, make sure you have a clear vision for your goals so you’ll be better prepared to plan your financial future.

While the process of diversifying your assets across multiple asset classes can help to reduce overall risk, it does not eliminate market risk altogether.


For most of us, it is unpleasant to envision a time when performing routine tasks may become difficult as the result of injury, illness or aging. If the time comes when you need substantial assistance performing daily tasks, it is unlikely you will want cost to be the primary decision-making factor for your long term care. Long term care (LTC) services can be expensive and costs generally continue to rise. Planning early can help ensure that you have more control in receiving the type of care you want — in the setting you choose, should the need arise.

What is Long Term Care?

Long term care includes a variety of services and supports to help meet personal care needs over an extended period of time. The services include help performing Activities of Daily Living (ADLs), such as: bathing, continence, using the toilet, transferring to/from a bed or chair, dressing and eating. Long term care services are generally not covered under personal health insurance or Medicare because they are not intended to cure, improve or treat a specific medical condition. Medicaid may help individuals with income and assets below state requirements.1

Whether long term care services occur in a nursing home, assisted living facility or your own home, the costs can be a huge expense. The average stay in a nursing home is 835 days (2.3 years) and $183,700.2 The national median hourly rate for a home health aide is $20 and that can add up quickly.3

Potential Ways to Pay for Care

A variety of sources may be used when expenses do not qualify under Medicare or personal health insurance.

In some cases, family members and friends may be able to help with some of the care you need — preparing meals, providing transportation; helping with housework, bills or medication for example. Caregiving can be rewarding, but it can also be stressful. It’s important to recognize when family caregivers need a break and/or can no longer provide the care you require.

When professional long term care is necessary, one option is paying with your own resources such as savings, investments, income (pension, Social Security, annuities) or even your home or home equity. Consider how long these sources might last and what other goals may be unfulfilled if these funds were used for care.

Another option is insurance designed for long term care expenses, or with the option to use the policy’s primary benefits for long term care if needed. For example, your existing life insurance or annuity may contain provisions to utilize benefits early in the event you need long term care. It is important to have an insurance professional review your existing policies and carefully explain the differences in the types of coverage available today.

Finally, you may be able to qualify for your state’s Medicaid program. Medicaid only pays after you meet eligibility requirements, including specific restrictions on income and assets.1

Making it Work

As you can see, there are many alternatives to consider when preparing for the possibility that you may need long term care. Generally, beginning early has advantages. First, at younger ages, you are more likely to be healthy and qualify for various types of insurance. Second, starting early means you may be able to meet your goal with lower installment savings amounts or annual premiums.

You don't have to prepare for long term care expenses alone. Our Financial Services Representatives can review a variety of solutions that may help you meet your goals.

1 For more information regarding benefits provided by Medicare or Medicaid (Medi-CAL in California) visit Medicaid guidelines vary by state. Contact your local Medicaid office for details.

2 National Nursing Home Survey 2014, National Center for Health Statistics.

3 Cost of Care Survey, Genworth, June 2015.


A trust is a fiduciary arrangement through which the trustee manages assets for the benefit of third parties. A trust is commonly used to transfer wealth to heirs or to favored charitable organizations. Insurance products, such as life insurance policies, annuity contracts and disability policies, may be used to fund trusts in appropriate circumstances.A trust is a fiduciary arrangement through which the trustee manages assets for the benefit of third parties. A trust is commonly used to transfer wealth to heirs or to favored charitable organizations. Insurance products, such as life insurance policies, annuity contracts and disability policies, may be used to fund trusts in appropriate circumstances.

Trusts are very flexible and may be drafted to meet the specific intent of the individuals creating the trust and customized to meet the specific needs of trust beneficiaries. You can use trusts as a key element in a comprehensive estate and wealth transfer plan, or to otherwise direct how your legacy will be managed and distributed after your death.

Advanced estate planning and trust services require specific knowledge typically not provided by many financial advisors. Using trust services means collaborating with a third party that has your best interests in mind while the trust is set up through an attorney. Trust services include:

  • Investment management & prudent diversification of account assets;
  • Periodic statements, annual tax reporting and investment reporting; cash management, safe custody and prompt distribution of assets;
  • Processing of capital changes such as stock dividends, splits, exchanges and tenders;
  • Bill paying, automated deposits and disbursements (ACH and wire);
  • Income collection and allocation

Traditionally, advisors had to refer clients to other providers. The person appointed as your trustee should have the knowledge and capability necessary to administer sometimes complex arrangements and to meet the fiduciary duties and responsibilities that are imposed under trust law. If properly drafted by an attorney and administered by the trustee, a trust can ensure that trust assets are managed and distributed after your death as you had desired.