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FAFSA for 2022-2023 School Year Opens on October 1

Sep 26, 2021 2:15:00 PM
written by The Retirement Group

October is the kickoff season for financial aid. That's when incoming and returning college students can start filing the Free Application for Federal Student Aid, or FAFSA, for the next academic year. The FAFSA is a prerequisite for federal student loans, grants, and work-study, and may be required by colleges before they distribute their own institutional aid to students.

How do I submit the FAFSA?
The FAFSA for the 2022-2023 school year opens on October 1, 2021. Here are some tips for filing it.

  • The fastest and easiest way to submit the FAFSA is online at studentaid.gov. The site contains resources and tools to help you complete the form, including a list of the documents and information you'll need to file it. The online FAFSA allows your tax data to be directly imported from the IRS, which speeds up the overall process and reduces errors.

  • Before you file the FAFSA online, you and your child will each need to obtain an FSA ID (federal student aid ID), which you can also do online by following the instructions. (Once you have an FSA ID, you can use the same one each year.)

  • The FAFSA can also be filed in paper form. But it will take much longer for the government to process it.

  • You don't need to complete the FAFSA by October 1. But it's a good idea to file it as early as possible in the fall because some federal aid programs operate on a first-come, first-served basis. Colleges typically have a priority filing date for both incoming and returning students; the priority filing date can be found in the financial aid section of a college's website. You should submit the FAFSA before that date.

  • Students must submit the FAFSA every year to be eligible for financial aid (along with any other college-specific financial aid form that may be required, such as the CSS Profile). Any colleges you list on the FAFSA will also get a copy of the report.

  • There is no cost to submit the FAFSA.


How does the FAFSA calculate financial need?
The FAFSA looks at a family's income, assets, and household information (for example, family size) to calculate what a family can afford to pay. This figure is known as the EFC, or expected family contribution. All financial aid packages are built around this number.

Tip: Starting with the 2023-2024 FAFSA (which will be available next year starting October 1, 2022), the EFC will be renamed the SAI, or student aid index.

When counting income, the FAFSA uses information in your tax return from two years earlier. This year is often referred to as the "base year" or the "prior-prior year." For example, the 2022-2023 FAFSA will use income information in your 2020 tax return, so 2020 would be the base year or prior-prior year.

When counting assets, the FAFSA uses the current value of your and your child's assets. Some assets are not counted and do not need to be listed on the FAFSA. These include home equity in a primary residence, retirement accounts (e.g., 401k, IRA), annuities, and cash-value life insurance. Student assets are weighted more heavily than parent assets; students must contribute 20% of their assets vs. 5.6% for parents.

Your EFC remains constant, no matter which college your child attends. The difference between your EFC and a college's cost of attendance equals your child's financial need. Your child's financial need will be different at every school.

After your EFC is calculated, the financial aid administrator at your child's school will attempt to craft an aid package to meet your child's financial need by offering a combination of loans, grants, scholarships, and work-study. Keep in mind that colleges are not obligated to meet 100% of your child's financial need. If they don't, you are responsible for paying the difference. Colleges often advertise on their website and brochures whether they meet "100% of demonstrated need."

Should I file the FAFSA even if my child is unlikely to qualify for aid since I work at a Fortune 500 Company?
Yes, probably. There are two good reasons to submit the FAFSA even if you don't expect your child to qualify for need-based aid.

First, all students attending college at least half-time are eligible for unsubsidized federal student loans, regardless of financial need or income level. ("Unsubsidized" means the borrower, rather than the federal government, pays the interest that accrues during school and during the grace period and any deferment periods after graduation.) If you want your child to be eligible for this federal loan, you'll need to submit the FAFSA. But don't worry, your child won't be locked in to taking out the loan. If you submit the FAFSA and then decide your child doesn't need the student loan, your child can decline it through the college's financial aid portal before the start of the school year.

Second, colleges typically require the FAFSA when distributing their own need-based aid, and in some cases as a prerequisite for merit aid. So filing the FAFSA can give your child the broadest opportunity to be eligible for college-based aid. Similarly, many private scholarship sources may want to see the results of the FAFSA.


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posted in FAFSA, School

Too Hot to Handle: What's Ahead for the U.S. Housing Market?

Sep 25, 2021 11:23:00 AM
written by The Retirement Group

The U.S. housing market, already strong before the pandemic, has heated up to record levels in 2021. The Case-Shiller U.S. National Home Price Index, which measures home prices in 20 major metropolitan areas, reported a 12-month increase of 18.6% in June 2021, the largest year-over-year gain in data going back to 1987.[1]


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ConocoPhillips Interest Rates Begin Upward Trend, Reducing Lump Sums

Sep 20, 2021 4:57:00 PM
written by Tyson Mavar RICP® of The Retirement Group (800) 900-5867

Interest rates are trending in the wrong direction for ConocoPhillips employees, considering the lump sum option on their pension payment, moving into Q1 2022. Interest rates had dropped for individuals who wish to commence their benefits in Q4 2021. Over the course of 2020, interest rates dropped dramatically, which greatly increased many lump sum payments. However, interest rates have been on the rise since Q1 2021. A segment rate increase in Q4 indicates an upward trajectory of interest rates. If this continues, lump-sums will rise again in Q1 2022. Should you desire to take your pension as a lump sum, ConocoPhillips will use interest rates and your age to calculate your lump sum payment. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship (except for Cash Balance Pension Lump Sum payouts). Even though it is too early to know blended interest rate figures for the first quarter of 2022, August figures were just released, and they show a slight increase, which is bad news for ConocoPhillips employees electing a pension lump-sum. August segment rates were recorded at: 0.66% / 2.50% / 3.12%.


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posted in Pension, Interest rates

Retiring & Worried About a Housing Crash?

Sep 19, 2021 9:32:00 AM
written by John Jastremski

The Real Estate market has been appreciating dramatically through the pandemic; The Federal Reserve's latest findings show that, within the first three months of this year, net worth for U.S. households rose by $960 billion solely based on the value of real estate owned." CNBC recently reported that "The 10-City composite rose 18.5%, up from 16.6% in the previous month" and "The 20-City composite was up 19.1%, up from 17.1% in the previous month." According to the S&P CoreLogic Case-Shiller Index report, Phoenix, San Diego, and Seattle reported the highest year-over-year gains. This brings back the large concern that we are in another 2007 housing bubble.


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Chevron Rates Decreasing, Pushing Lump Sums Upward

Sep 15, 2021 12:00:00 AM
written by Wesley Boudreaux of The Retirement Group (800) 900-5867

Chevron interest rates decreased 0.11% in the most influential segment for those who commence their benefit in November 2021. This correlates to this month's overall decrease in rates, and the result will be slightly higher lump-sums for those retiring in November. When Chevron employees elect the month they would like to begin their pension, Chevron looks back to the third, fourth, and fifth month's rates to calculate the rates used for the pension disbursement. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship. Through the pandemic, interest rates dropped dramatically which has greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since December, rates have increased, causing a reduction in pension lump-sums.


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posted in Pension, Interest rates

IRS Releases 2022 Key Numbers for Health Savings Accounts

Sep 14, 2021 9:34:25 AM
written by The Retirement Group

The IRS has released the 2022 contribution limits for health savings accounts (HSAs), as well as the 2022 minimum deductible and maximum out-of-pocket amounts for high-deductible health plans (HDHPs). An HSA is a tax-advantaged account that's paired with an HDHP. An HSA offers several valuable tax benefits for Fortune 500 employees:


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Market Month: August 2021

Sep 6, 2021 9:47:00 AM
written by The Retirement Group

The Markets (as of market close August 31, 2021)

The benchmark indexes enjoyed a solid August, with the S&P 500 and the Nasdaq reaching record highs multiple times during the month. In fact, the S&P 500 recorded its seventh straight monthly advance — its longest streak of monthly gains since January 2018. Each of the benchmarks is well ahead of its 2020 year-end value, led by the S&P 500, followed by the Nasdaq, the Global Dow, the Dow, and the Russell 2000. Ten-year Treasury yields increased and crude oil prices fell, while the dollar and gold prices inched higher.


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U.S. Census 2020 Results: Takeaways

Aug 24, 2021 2:57:41 PM
written by The Retirement Group

Every 10 years, the U.S. Census Bureau releases its final count of the U.S. population.

The new census numbers determine a state’s congressional representation in the U.S. House of Representatives for the next decade, along with the amount of money each state will receive from the federal government.

The 2020 Census was released in April 2021. Here are a few takeaways.


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posted in Census, 2020

Chevron Interest Rates Decline, Raising Lump-Sums

Aug 19, 2021 3:02:31 PM
written by Wesley Boudreaux of The Retirement Group (800) 900-5867

 

Chevron interest rates decreased 0.19% in the second segment for those who commence their benefit in October 2021. This is the first time in several months that interest rates have dropped this much, and the result will be slightly larger lump-sums for those retiring in October. When Chevron employees elect the month they would like to begin their pension, Chevron looks back to the third, fourth, and fifth month's rates to calculate the rates used for the pension disbursement. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship. Through the pandemic, interest rates have dropped dramatically which has greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since December, rates have increased, causing a reduction in pension lump-sums.


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posted in Pension, Interest rates

Student Loan Payment Pause Extended Through January 2022

Aug 18, 2021 12:24:43 PM
written by The Retirement Group

You or many in your area may have been expecting to start paying the burden of student loan payments in the upcoming month. On August 6, 2021, the U.S. Department of Education announced an extension of the pause on federal student loan payments to January 31, 2022. The payment moratorium, currently in effect for millions of federal student loan borrowers, was set to end on September 30, 2021.


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posted in Student Loans, Finances