College is Right Around the Corner

May 4, 2022

Why Start Planning Now?

  • A child that is born now will face tuition costs that are three to four times higher than what they are now.
  • It is never too early to start planning for your child's future.

Putting Money Into Section 529 Plans?

  • Earnings are federal and state income tax deferred, and withdrawals are federal tax free, if used for qualified higher education expenses. Some states offer a deduction for contributions.
  • Tuition, fees, books, supplies, equipment and room and board are qualified expenses.
  • The amount that can be made varies by state. Some states may allow account balance limits as high as $250,000/beneficiary.
  • There are no income restrictions.
  • Earnings on non-qualified withdrawals taxed at owner’s rate plus 10% penalty. Withdrawals can be made in amount equal to scholarship

Putting Money Into Mutual Funds?

  • Money can be withdrawn anytime for any purpose.
  • There is no limit on how much can be invested, no income restriction, and no impact on tax credits.

Putting Money Into Education IRA?

  • The earnings are exempt from federal income tax, if used for qualified elementary, secondary and higher education expenses.
  • Tuition, fees, books, supplies, equipment and room and board are qualified expenses.
  • The account value is removed from the account owner’s taxable estate.
  • Up to $5,500 can be invested into the account, per year per beneficiary.
  • The earnings on non- qualified withdrawals are taxed at the owner’s rate; 10% penalty on earnings.

Putting Money Into Traditional & Roth IRA?

  • Traditional IRA may be tax- deductible and entire proceeds taxed at the owner’s rate.
  • Earnings on Roth IRA are tax-exempt, but the account has to be held for 5 years for distributions and the owners are 59½ or older.
  • The account value is included in the account participant’s taxable estate.
  • Up to $6,000 can be invested into the account per year.
  • Tuition, fees, books, supplies, equipment and room and board are qualified expenses.
  • There are no impact on tax credits
  • No penalty on early withdrawals if used for qualifying education expenses. For Roth IRAs, earnings of early withdrawals taxed at the owner’s rate.

Putting Money Into a UGMA/UTMA?

  • When child is under the age of majority, first $950 of unearned income is tax exempt; next $950 taxed at the child’s rate; the rest at parent’s rate. After child turns 18, all earnings taxed at child’s rate, unless enrolled as a full-time student, then age 24.
  • There is no limit on how much can be invested, there is no income restriction, and no impact on tax credits.
  • Money can be withdrawn anytime for the benefit of the child
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2023 Webinar Line Up

We at Verus are still continuing to host educational and interactive webinars throughout the year so you can learn from the comfort of your home! Click to see the webinar links!

Strength in Houses

The extended strength of the US housing market prompted households to withdraw $82 billion of home equity in Q1, the largest amount in 15 years. Going forward, refinancing will likely be subdued as the average mortgage borrower has already locked in an interest rate over 200 bps below current rates. We believe that record-high levels of untapped home equity may add to the sizable savings buffer that households hold.‍

Your 2022 Half-Year Planning Checklist

As 2022 draws to a half, it’s time to begin organizing your finances for the second half of the year. To help you get started, we’ve compiled together a list of key planning topics to consider. Your Verus Financial Advisor can help you rebalance, review and reset your course, if necessary, for this year and beyond.

Where are we now in the market?

The market appears to be caught in a traditional growth scare if there is anything that is scaring the markets right now it's not just happening in US it's happening broadly as well. The roller coaster continues so we're seeing yields higher, and stocks lower and why that is happening we're actually going through a period of transition where the stimulus you know the sugar rush from stimulus is wearing off.

Estate Planning 101

A good estate plan helps ensure the right people will receive the right property at the right time. When you die, your assets are subject to a number of expenses that can significantly reduce the size of your estate left to your heirs. Proper estate planning can minimize these expenses and determine how the costs that remain will be paid.

Using Taxes to Your Advantage

Tax planning is the analysis of a financial situation or plan from a tax perspective. It is the reduction of tax liability by the way of exemptions, deductions, and benefits. The purpose is to ensure tax efficiency. Tax planning includes making financial and business decisions to minimize the incidence of tax.

Protecting Your Greatest Asset

To put it in simple terms, disability insurance is insurance for your income. It allows you to protect your most valuable asset, your income, in the event you become too hurt or sick to work. There are two options: Short-term and long-term. Analyze your existing coverage to find the plan that best fits your lifestyle! It can be more affordable than you think and the benefit can be used for different things such as medical expenses, household expenses, or help with household tasks. Most people protect their home, car, phone, and identity so why not protect your income.

Protect Your Loved Ones With Life Insurance

If you were to die unexpectedly, would your spouse have enough money to cover funeral expenses and daily living expenses? Would there be enough money to pay for everything your family relies on you for, if you were suddenly not around? Would your family have to move and change their lifestyle if you were to die prematurely? If your spouse were to outlive you by 10 or 20 years or more, would they be able to make ends meet? Life insurance pays cash to your loved ones after you die, allowing them to remain financially secure.

College is Right Around the Corner

Why Start Planning Now? A child that is born now will face tuition costs that are three to four times higher than what they are now. It is never too early to start planning for your child's future. There are many ways to save for college. Some you might have heard before, some you might not have. This article easily sums up different college saving plans that you can potentially think about using.

The Basics of Investments

What is Investing? Investing is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime, or look for a higher-paying job. There are many ways you can invest which include putting money into stocks, bonds, mutual, real estate, or starting your own business. It does not matter which method you choose for investing your money, the goal is always to put your money to work so it earns you an additional income.

Why You Should Keep Investing Even When Markets Are Down

As investors during a decline in the market, it is difficult to remember why we decided to take the risk of investing. In its best days and its worst days, the stock market draws the most attention, but there is one surefire way to keep trading worth your time: Stick it out for the good and the bad. If you plan for the long-term, don't panic. Instead, here are 3 reasons to keep investing, even in the worst of times.

What does Fed rate hike mean for the market?

The big news today is that Chairman Jerome Powell and the Federal Reserves announcing a 25 basis point hike in interest rates. Let's see how this could potentially affect the market. If we take a look back at historical data, the S&P 500 has averaged a 3.7% growth, 12-months following the first rate hike of each cycle from 1971 to 2004. 24 months after the first hike, it has seen an average of 16.3% growth and averaged 31.0% after 36 months.

August Market Summary

GLOBAL EQUITIES: Q2 earnings data kept Delta variant concerns at bay, initially reversing the S&P 500’s mid-week decline. However, despite US Q2 GDP posting above its pre-pandemic peak, it came in lower-than expected, leading the S&P 500 to end the week lower by -0.35%. Meanwhile, Chinese stocks saw significant volatility as investors grappled with Beijing’s tighter financial regulations. The MSCI China Index ended the week lower at -6.06%. In the UK, a drag in the mining sector and variant concerns left the FTSE 100 up only 0.10%.

Mega Roth IRA: What It Is And How It Can Work For You!

Roth IRAs have been a popular topic as of late. For a long time, it was an unspoken secret used by retirement planners. However, the IRS released guidance that specifically addressed both backdoors Roth IRA conversions, and the so-called Mega Roth IRA. As a result, it has gained even more traction and interest.

Where Will Your Equity Profile Be in a Year?

The market is disengaged from financial fundamentals and all reality. Remember December 2018when the market fell 20% (over three months) over a “potential” China trade war? And remember the big rally in 2019 – and you’re saying to yourself “If only I had bought back then!” Surprise! You're getting a second chance!

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