Smart IRA Planning Can Help You Save Money for College

Source: Mike Branch, The Huffington Post

With college expenses at some of the best schools now exceeding $60,000 per year, education-related expenses are often one of the biggest obstacles many baby boomers face when saving for their own retirement. For many families, planning for a college education goes hand in hand with IRA’s and retirement planning.

Retirement Assets are Exempt from the EFC

A family’s Expected Financial Contribution or EFC is determined by a Federal formula after submitting the Free Application for Federal Student Aid (FAFSA) form. Typically, this is done in the winter or spring of a student’s senior year of high school.

IRAs and other retirement accounts are exempt assets when calculating a family’s need for financial aid. A family can have $1,000,000 or more in an IRA or qualified retirement plan with no impact on their EFC.

To lower a family’s EFC and increase their potential to receive financial aid families should consider strategies to maximize contributions to their IRA, 401(k) and other retirement accounts. And they should fund those accounts before completing the FAFSA or other financial aid forms.

For example, a family with two 50-year old parents can put $6,500 into Roth IRAs for each parent and up to $23,000 each into their 401(k). A total of up to $59,000 in assets can be sheltered from the financial aid calculation in this way each year.

Employee contributions to retirement plans are factored into the family’s EFC; however, employer contributions are not. In the example above, the $23,000 employee contribution to the 401(k) gets added back into the financial aid calculation as non-taxed income. The benefit of this strategy is not that the income is lower for purposes of qualifying for additional financial aid, but that the assets are removed from the financial aid calculation. In the case of a family with significant assets, maximizing retirement plan contributions can help shelter at least some of those assets from the calculation of need on the FAFSA form allowing them to possibly qualify for additional financial aid.

Tax Savings

Families may also benefit from the tax savings that come from making such a large retirement plan contribution. The tax savings can then be redirected towards college expenses. By contributing up to $46,000 ($23,000 from each parent) to their employer’s 401(k) plan, a family can reduce their tax bill significantly. The tax savings can be used to help cash flow a chunk of college expenses. This may be an effective strategy for some families who may be good candidates for need-based financial aid, but have significant non-retirement assets.


Everything Is Awesome

“Everything is awesome. Everything is cool when you’re part of a team.”

Company culture is very important to us and we’re always brainstorming ways to develop our skill sets. Today, we did an accountability exercise using LEGO cars! Each employee was assigned a task to pick up a designated bag of LEGO parts and bring it to the weekly company meeting. Those who did not fulfill their task were unable to contribute to their team’s LEGO car. There were a total of nine teams with three racing in each heat. The winning team of each heat raced for the title of champion… and a gift card!

How to Balance Spending and Safety in Retirement

Source: Darrow Kirkpatrick, MONEY

piggy banks

Every retirement withdrawal method has its pros and cons. Understanding the differences will help you tap your assets in the way that’s best for you.

You’ve saved for years. You’ve built a sizable nest egg. And, finally, you’ve retired. Now, how do you withdraw from your savings so your money lasts as long as you do? Is there a technique, a procedure, a product that will keep you safe?

Unfortunately, there is no perfect answer to this question. Every available solution has its strengths and its weaknesses. Only by understanding the possible approaches, then mixing them together into a personal solution, will you be able to move forward with an enjoyable retirement that balances both spending and safety.

Let’s start with one of the simplest and most popular withdrawal approaches: spending a fixed amount from your portfolio annually. Typically this is adjusted for inflation, so the nominal amount grows over time but sustains the same lifestyle from year to year. If the amount you start with, in year one of your retirement, is 4% of your portfolio, then this is the classic 4% rule.

The advantages of this withdrawal method are that it is relatively simple to implement, and it has been researched extensively. Statistics for the survival probabilities of your portfolio, given a certain time span and asset allocation, are readily available. This strategy seems reliable—you know exactly how much you can spend each year. Until your money runs out. Studies based on historical data show your savings might last for 30 years. But history may not repeat. And fixed withdrawals are inflexible; what if your spending needs change from year to year?

Instead, you could withdraw a fixed percentage of your portfolio annually, say 5%. This is often called an “endowment” approach. The advantage of this is that it automatically builds some flexibility into your withdrawals based on market performance. If the market goes up, your fixed percentage will be a larger sum. If the market goes down, it will be smaller. Even better, you will never run out of money! Because you are withdrawing only a percent of your portfolio, it can never be wiped out. But it could get very small! And your available income will fluctuate, perhaps dramatically, from year to year.

Another approach to variable withdrawals is to base the amount on your life expectancy. (One source for this data is the IRS RMD tables.) Each year you could withdraw the inverse of your life expectancy in years. So if your life expectancy is 30 years, you’d withdraw 1/30, or about 3.3%, in the current year. You will never run out of money, but, again, there is no guarantee exactly how much money you’ll have in your final years. It’s possible you’ll wind up with smaller withdrawals in early retirement and larger withdrawals later, when you aren’t as able to enjoy them.


We’re Hiring

Marketing Copywriter

We are expanding our fun-loving and hard-working marketing team to include a marketing copywriter. Yes, we are looking for another team member who has a knack for creativity and thinking outside the box. We want to stand out from the crowd and we need your help! The ideal candidate will conduct research and gain knowledge on individual retirement accounts (IRAs) to generate content that complements visual concepts produced by our design team. He or she will collaborate with various departments within the company. Other responsibilities include improving marketing materials, evaluating copy for campaigns and meeting deadlines while providing support to the sales and marketing teams.


    • Compile and draft content related to Provident Trust Group’s services including self-directed IRAs, retirement topics and alternative investments
    • Provide support to PR & marketing coordinator for eNewsletters, eBlasts, social media, client statements, company mailings and more
    • Provide support to marketing/design coordinator for videos, banner ads and overall marketing collateral
    • Write instructional content including eBooks, templates, whitepapers, etc.
    • Convert digital visitors into leads and leads into consumers via targeted marketing strategies
    • Participate in brainstorming sessions for content generation
    • Create all sales support materials—digital and print
    • Ensure content aligns with our brand, products and services, and audience segmentation
    • Manage projects from inception through completion


  • Bachelor’s degree in marketing, advertising, creative writing or related field
  • Minimum 2 years of professional writing experience preferred
  • Content samples that demonstrate writing skills
  • Experience with marketing campaigns, SEO and SEM
  • A passion for writing creative and technical copy
  • Ability to think creatively and translate ideas into content
  • Strong organizational and research skills
  • Have an understanding of marketing principles and brand positioning
  • Excellent editing/ grammar skills and attention to detail
  • Strong, clear and concise communication skills
  • Excellent independent and team collaboration skills
  • Ability to complete project deadlines with minimal errors
  • Ability to interact with multiple departments under pressure
  • Passion for proactive thinking
  • Proficiency in Microsoft Office

Here at Provident Trust Group, we are an equal opportunities employer and we promote a work-life balance. We love what we do while having time to enjoy life and our families. We are a young IRA custodian and administrator that specialize in self-directed IRAs with comprehensive trust and escrow services. We currently serve more than 30,000 clients in 50 states. Our growth is recognized by our presence on Inc. 500ǀ5000’s list of the nation’s fastest-growing private companies for four consecutive years. But wait, there’s more! We received an award from Southern Nevada Human Resources Association for 2014 Best Places to Work. That’s just the tip of the iceberg! Qualified candidates should submit their resume to