What parents need to know about the new FAFSA timeline for student financial aid
College is expensive, and getting financial aid that doesn’t have to be paid back is every parent’s dream. To achieve that dream for your child in the 2017-2018 school year, you need to be aware of two significant changes to the FAFSA (Free Application for Federal Student Aid) process. Otherwise, your child could miss an opportunity for federal grants and work-study funds.
The financial aid clock is ticking
The most significant change is thatContinue
State plans for private-sector workers are granted ‘safe harbor’ despite retirement industry concerns
On Aug. 25, 2016, the US Department of Labor (DOL) issued final regulations that exempt state-run retirement plans for private-sector employees from the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). While this will allay state fears that the plans would have to be ERISA-compliant, and thus incur additional costs, the retirement industry has reiterated numerous concerns about this development dating back before the release of the similar proposed rules last November. (For background on this issue, see my Nov. 20, 2015, blog post titled DOL riles retirement industry with ERISA exemption for state-run IRAs.)
Requirements for safe harbor status
To date, eight states —Continue
How the architects of CollegeBound 529 approached the challenge of keeping up with skyrocketing education costs
In 2015, the State of Rhode Island selected Ascensus College Savings as the program manager and Invesco as the investment manager for the state’s 529 college savings plan, which is available to investors nationwide. In this role, we at Invesco created a suite of investment options specifically designed to meet the unique needs of college savers, who face fast-growing college costs and a limited time to save.
Our plan has three tiers:Continue
We may not like seeing those deductions on our paychecks, but they serve a valuable role
It was 43 years ago that I got my first “real” job working in a photo development plant on weekends cleaning chemical tanks. My pay was $1.60 per hour. That’s not a misprint; it was the minimum wage at that time. I was very excited to get my first real paycheck. In the past, I had worked mowing lawns and shoveling snow. This was to be a real working man’s paycheck.
It was simple math: 10 hours at $1.60 per hour – I should get $16.00. Imagine my surprise when my check was less, due to federal and state taxes and something called FICA.
“What are all these deductions?” I wondered. “And what is FICA?” It was easy to understand federal and state taxes, but taking money for my retirement? I was 17 years old – ludicrous, I said!
Payroll deductions are a valuable means of funding retirementContinue
As CITs rise in popularity, we examine the top questions surrounding the investment vehicles
Collective investment trusts (CITs) — pooled investment funds designed exclusively for qualified retirement plans — have been garnering a lot of attention and assets in recent years. They account for $2.4 trillion (or 16%) of the $15 trillion invested in 401(k)s and pension plans, up from $1.3 trillion (12.7% of the total) in 2009, according to the Investment Company Institute and Cerulli Associates.1
One of the reasons I believe CITs are becoming more popular these days is the enhanced understanding plan fiduciaries and other decision-makers have about the investment vehicles. Such advisors, I believe, need to be well-versed in CITs to be able to objectively weigh their benefits and considerations. A lack of familiarity isn’t a good reason to ignore these investment vehicles, which may be appropriate for many plans.
To help with the information-gathering process, I’ve listed some of the top questions we receive from clients and prospects about CITs, along with answers I believe will help shed light on this growing investment trend.Continue
Part of Invesco Legislative Insights series
Professional groups representing the brokerage and insurance industries filed suit last month challenging the Department of Labor’s (DOL’s) fiduciary regulation finalized in April. The rule requires financial advisors to act in the best interest of their clients in retirement accounts, but opponents say the costs of implementing this new standard would ultimately result in fewer investors receiving professional advice.