Join NASA Federal on October 18, 2014 for the Light the Night® walk to benefit the Leukemia & Lymphoma Society. Come together at 5:00 p.m. at Freedom Plaza, Washington, D.C., with friends, family and coworkers to enjoy a two-mile evening walk followed by live entertainment and refreshments. Can’t walk with us? Make a tax-deductible donation to Light the Night instead. Visit nasafcu.com/lightthenight to join or donate today!
Plus 7.9% APR* Balance Transfers for Life!
Want more from your credit card,like great savings, outstanding rewards and points that never expire? Of course you do! So apply for the NASA Federal Platinum Advantage Rewards Credit Card today by calling 1-888-NASA-FCU (627-2328), ext. 200, or visit nasafcu.com/7.9.
*APR = Annual Percentage Rate. 7.9% APR is only available to qualified members on balance transfers made within 90-days after account opening. Balance transfer made after that time would be made at the standard Balance Transfer APR (9.9%-17.99%). Minimum transfer amount is $500. The total transferred may not exceed your available credit card limit. There are no balance transfer fees. Purchase APR (9.9%-17.99%). Cash Advance APR (11.9%-17.99%). All APRs are based on creditworthiness and will vary with the market based on the Prime Rate. The penalty APR of 18% may be applied if you make a late payment. Cash advance fee: $3% of the advance ($5 minimum). Eligibility and Membership in NASA FCU required. All offers subject to credit approval. NASA FCU is Federally Insured by NCUA. View Terms and Conditions *Balance transfers are considered cash advances, therefore no grace period applies and finance charges will begin on the transaction date. This offer is valid for balances transferred from other institutions only. Please continue making payments on your other credit card account(s) until the balance transfer is confirmed on your other institution’s account statement. View Terms and Conditions at nasafcu.com/platinum-advantage-rewards-credit-card-terms.
A Nominating Committee has been appointed by the NASA Federal Credit Union Board of Directors to propose candidates for the 2015 Election of Officials. Members are invited to make suggestions to the Nominating Committee by forwarding names and qualifications to:
Chairman, Nominating Committee
NASA Federal Credit Union
P.O. Box 1588
Bowie, MD 20717-1588
Suggestions must be received no later than Friday, November 14, 2014. The list of nominees will be included with your statement mailed in January 2015.
Starting on October 21, 2014, BillPay+ will be simpler and more convenient to use. The BillPay+ homepage will become an account dashboard that allows you to monitor payment activity. Be sure to experience the online demo at nasafcu.com/bp-demo for an overview of the exciting enhancements coming to BillPay+. We’re sure you’ll be very pleased with the new BillPay+ user experience!
Effective retirement planning is a simple equation. You have to make sure your passive sources of income meet or exceed your monthly expenses. For most of your income, like your retirement accounts, Certificates and investments, that income is easy to calculate. You know the rate of return and you know the amount you have saved.
One potential source of retirement income that’s a lot harder to predict, though, is Social Security. While it shouldn’t be your only source of retirement income, Social Security benefits can provide an added layer of comfort to your retirement. Planning around them, though, requires knowing the amount of your benefit.
That can be a tricky process. The complex web of contributions and regulations can make figuring out your monthly benefit a nightmare. You may need something stronger than a COLA once you’re done working your way through the nightmare of acronyms and bureaucratic doublespeak that make up Social Security laws.
Fortunately, this part of your retirement planning just got a lot easier. A new wave of apps called Social Security benefit calculators can simplify the process dramatically. They couldn’t be much easier to use.
Just input your yearly income, your age, and the date of your retirement. The program takes that information and generates a monthly benefit for you. Some of these programs even include an inflation adjustment tool to let you see how your benefit may change in response to changing economic conditions.
Basic calculators, like those available from the Social Security Administration, will do that and nothing more. These more advanced utilities will let you adjust the information you get based upon a variety of factors. This helps you to visualize the kind of portfolio performance you’d need to supplement your Social Security income.
More than figuring out how much your benefit will be, though, these utilities let you fiddle with numbers to see how to best optimize your Social Security benefit. By changing your retirement date, modifying your income and/or shuffling other variables around, you can see how your retirement income will change in response to your decisions. These adjustments can help you make an informed decision about how and when to retire.
More to the point, these tools will help you make the difficult decision about when to claim Social Security. The monthly benefit you and your spouse will receive increases every year between the time you turn 62 and the time you turn 70. The caveat to this increase is that you’ll likely have less time to spend it. Balancing these demands can be made easier with a calculator tool.
But keep in mind, there are more than a few hazards to making firm plans using one of these utilities. Even the best Social Security benefit calculator can’t predict the future. Social Security regulations are a hot-button political issue. Things like cost of living and inflation adjustments can change in response to political as well as economic circumstances. If these regulations change, so will your benefit.
Social Security itself is always in jeopardy, too. It’s the single largest expenditure in the federal budget and it comes under fire every year. If you build your retirement around Social Security income, you might be in trouble as government budgets get tighter.
Also, remember that these tools are for informational purposes only. You shouldn’t interpret these results as a guarantee of benefit. Many personal circumstances are considered when figuring your benefit and no calculator can capture them all. Treat this information as a useful planning guideline, but not as a contract.
The most basic planning tool is offered by the Social Security Administration. It’s regularly updated and provides the most direct pipeline to the byzantine network of regulations that govern Social Security. While it doesn’t allow you to customize your results much, it’s a good introduction to planning.
Probably the best tool of the bunch is SSAnalyze! SSAnalyze offers the greatest range of flexibility in input options. It allows you to set a range of life expectancies, adjust for changes in income (if your spouse was to retire early or you were to go part time), and account for a large number of household arrangements (domestic partnerships, blended families, and so on). SSAnalyze! has a little bit of a learning curve, and anticipating the results can be daunting, but the flexibility of this powerful tool makes it a great resource for retirement planning.
No matter the result you get from your experience with a Social Security calculator, it’s only one part of the retirement planning package. You need to take this information and add it to the list of things you know about your retirement options and plans. If you want personalized financial advice that uses that information to get you on the path to your truly golden years, speak with a representative from your credit union today. The trained financial service experts there can set you up with a range of savings and investment instruments that will let you enjoy the retirement lifestyle of your dreams. Call 1-888-NASA-FCU (627-2328) or stop by NASA Federal Credit Union today, and get on the path to your financial future.
Q: My oldest child is about to begin her senior year of high school, and her younger brother is about to begin his sophomore year. We’ve already started getting letters from colleges, and I’m worried that her dreams will have a price tag we won’t be able to deal with. We’ve got some savings, but are worried it might not be enough, especially when both kids go to school. What can we do to maximize our chances of getting scholarship funds?
A: If you’re the parent of a college-bound high school student, you’ve probably already started receiving junk mail with pictures of big, impressive stone facades on the outside and big, appalling price tags on the inside. It’s college recruitment season, and college costs are at an all-time high. If your young scholar has his or her sights set on a private school, you can expect to shell out about $120,000 on tuition.
Whether or not you plan to help your children pay these costs, the federal government will use your financial status to assess your child’s financial need in terms of an Expected Family Contribution (EFC). Whether you expect to qualify or not, you’ll have to fill out a Free Application for Federal Student Aid – the FAFSA form. This form will be used in determining your child’s eligibility for a variety of scholarships, including subsidized student loans, Pell grants and other need-based financial aid.
The equation the government uses to calculate the EFC based on the FAFSA is publicly available. With this knowledge, you can move assets around to make your financial situation look as unimpressive to the government as possible. By doing so, you can help your child get qualified for more financial aid for college. You can help pay for school without spending any money by taking these steps:
- Reduce your cash assets. The FAFSA formula expects that you’ll use a portion of your liquid assets – that is, money in savings accounts, money market accounts, brokerage accounts, CDs and checking accounts – to pay for college. If you’ve got significant savings there, consider using it to pay down your mortgage or save it in a retirement fund. Neither of these accounts are considered “cash” as far as the FAFSA is concerned.
- Move investments into real property. The assets of your business are protected by the FAFSA equation. If you’ve been considering a capital upgrade, like new equipment or a bigger office, now might be the time to do so. If you don’t own a small business, consider shifting your savings into rental property or making improvements to your home. Both of these will reduce your cash assets.
- Make purchasing decisions with asset reduction in mind. If you are thinking about taking a big vacation before you send your little ones back to school, consider paying for it with a withdrawal from your savings rather than financing it through debt. The debt will accumulate interest, while the reduction in assets will make your EFC smaller.
- Review Retirement Account Contributions. If you haven’t already done so, maximize your tax-deductible contributions to retirement accounts. This will lower your income without counting as assets for the FAFSA. You can do the same thing if you’re planning a large, one-time charitable gift or other tax-deductible expense.
- Don’t lie on the FAFSA. It seems obvious, but bears stating. Lying on the FAFSA is a federal crime that could put you in serious trouble. Any money you gained with a fraudulent FAFSA would have to be paid back, usually with penalties.
- Reduce savings in your child’s name first. Because children have fewer expenses, they’re expected to pay a higher percentage of their assets. You can put the money back into savings on his or her behalf after graduation.
- Discuss college planning with gift-giving relatives. If grandparents are thinking of making a significant gift, ask them to hold off until after graduation. Once the FAFSA has been submitted, it’s good for a whole year.
- Be wary of firms that promise to reduce your EFC by huge margins. Often, these savings offers are pitched to desperate parents as a way to sell low-return annuities. These annuities can come with their own serious financial repercussions.
- Buy needed supplies before you fill out the FAFSA. Your student will need thousands of dollars worth of supplies, from computers to dorm furnishings. You can usually get a better price if you buy early. Also, you can deduct that money from college savings.
- Time your return to school. If you or your spouse is considering returning to school to pursue a higher degree, consider enrolling concurrently. Having two members of the family in college simultaneously allows you to divide your EFC by two.
- If your child is employed by the family business, it may be time to let them go. Student income is one of the biggest expected sources of contribution, and students who earn significant income will not qualify for financial aid.
These tricks can only affect your EFC so much. Don’t expect miracles. Unless you’re right at one of the significant FAFSA thresholds, you will likely only end up with some deferred interest loans. For help paying the rest of college expenses, get help from a trusted lender like NASA Federal Credit Union.
Our representatives can help you set up college savings plans for younger children, and may be able to offer competitive rates on student loans for children who are ready to leave for school. Call 1-888-NASA-FCU (627-2328), email firstname.lastname@example.org, or stop by NASA FCU today, to get help financing your educational future.