Patrick Peason has been in the financial industry for over 25 years, and specializes in the unique challenges that face today's retirees and pre-retirees. In today's tough market economy, seniors especially need to fully understand all the various options that are currently available to assist them in protecting and growing their investment portfolios.
Since Pat’s focus is on serving the needs of retirees and pre-retirees, he offers conservative strategies that seek to minimize risk to principal while maximizing income.His process helps each client understand how much risk is appropriate in determining the optimalasset allocation for them. This strategy has served Patrick and his clients well; his success has garnered him some of the industry's most prestigious awards. Additionally Pat has hundreds of happy clients across the state. An award winning national speaker, Pat also instructs top level executives to help them become more effective communicators. This will be an entertaining, informative and dynamic program!
Among the many challenges unique to today's generation of working parents trying to save for retirement is the fact that college tuition costs have never been higher. According to figures from the College Board, the average cost of attending a public university (including tuition, fees, room, and board) for the 2013-2014 academic year was $18,391 for in-state students and $31,701 for out-of-state students. For private, non-profit colleges and universities, the average was $40,917.*
So daunting are those numbers for most parents that a majority of them admit they aren't even trying to save for their children's college. In a report released recently byCertified Financial Planner (CFP) Board of Standards, Inc., more than two-thirds (69 percent) of 1,003 parents surveyed said that they have not started saving for their children's higher education because everyday living expenses have left no additional funds.**
It's a sad finding, of course, but not really surprising when you consider that those "everyday living expenses" may include not just food, housing, and utilities, but a multitude of other financial demands and predicaments that are - in many instances - unique to today's generation of working Americans.
Is it Any Wonder?
As I've noted in previous columns, some of these predicaments have arisen in just the past few years as part of the fallout from two major stock market drops since the year2000, the collapse of the housing market, and the onset of the Great Recession. In the wake of the recession, for example, many Americans were forced to refinance their mortgages. At the same time, basic middle-class living costs have gone up while incomes have stagnated. And here's the biggest irony: according to the CFP survey, nearly half of today's working parents (an estimated 48 percent) have fallen behind on their own college loans and are still struggling to pay off their student debt! So, is it really any wonder that junior's college fund has been forced way down on the priority list?
Interestingly, though,the CFP survey also indicates that among the priorities most Americans put ahead of college planning, the top two are: building an emergency fund and saving for retirement. That's interesting because it suggests the assumption that college planning and retirement planning need to be, or ought to be, separate things, which is not really the case. On the contrary; people should be aware that comprehensive financial planning can enable you to meet your current needs while working toward all of your long-term goals - including college and retirement - simultaneously, and often in ways that are mutually beneficial to each goal. Conversely, separating and prioritizing long-term goals can very often cause you to miss out on opportunities to enhance or expedite the growth of your assets overall, or to protect them from unnecessary losses. This requires strategy, however, and financial planning expertise on an expert level.
Tax Breaks
To clarify that point, let's look at those CFP survey respondents who reported that they were, in fact, saving for their children's higher education. Among them, the majority (61 percent) said that they were doing so through a savings account, while 40 percent said they were using a 529 plan and 33 percent said they were using "investments." Now, these strategies may all be ideal for these individuals depending on their situations, and provided they are part of a comprehensive plan that also incorporates retirement and other long-term goals. If not, then these individuals may not be saving for college nearly as effectively as they could be. They may, for instance, be losing out on tax breaks or opportunities to maximize returns on their 529 plans and investments. Also, hopefully these parents are aware that certain investment tools undercut financial aid eligibility while others do not. That's important when you consider 56 percent of people surveyed said they were"counting on" some level of financial aid to help cover their children's college costs.
The bottom line is that with so many unprecedented financial challenges facing Americans as they plan for retirement, it's understandable that for many, the prospect of saving for college might seem too daunting to even think about. But the fact is,professional guidance and comprehensive financial planning can help you not only put the kids through school, but simultaneously prepare for a comfortable retirement marked by financial security and dependable, lifelong income.
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