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Financial Simplicity Should be a Retirement Priority

By WTOP Staff

Enticing sign up offers tempt us to open new accounts all the time. We might get a few hundred dollars to switch brokerages and $50 to open a checking account and end up with a complex mess of financial accounts. This hinders not only our ability to see the big picture, but the maze of complex rules can also get us in trouble in retirement. Here’s why you need to simplify your investments before retirement:

You will have more difficulty spotting a mistake. It would be hard to double check every credit card bill if you had 17 different cards. Those who have only one credit card can much more easily check the transactions. With fewer accounts, you are also more likely to remember the due dates and whether you made payments, thus avoiding late fees.

Fewer accounts means lower fees. Those who have accumulated enough money to retire often qualify for seldom advertised perks. Most financial institutions give more benefits to customers who have more assets held with the firm. Free checking, lower mortgage rates and smaller investment fees are among the perks offered to people who maintain a large balance at a single financial institution.

You get better service. You may not need customer service when you complete most of your financial transactions online. However, access to personalized customer service may come in handy when something goes wrong. It’s much easier when someone on the inside is trying to work out a problem for you.

You may lose the ability to deal with complications. It won’t happen overnight, but everybody slowly loses his or her ability to manage complexity. The bigger the mess, the more brain power required to even remember it all. With too many accounts scattered all over the place, you may not be able to properly manage the moving parts.

Your heirs won’t want to deal with it. Micromanaging your investments may be your life calling, but your complex web of accounts will come crashing down on your children when the whole situation is thrust upon your heirs. No matter how obvious you feel you’ve spelled things out, everything will be brand new and hard to comprehend for a third party. The simpler you can make your finances, the more your heirs will get to keep, as they won’t need to spend precious time trying to understand everything.

There’s more time to optimize with less complexity. Being able to handle the complications isn’t good enough, because the time you spend juggling could be spent finding new ways to optimize your finances instead. Are you in the cheapest investment for the asset class you want included in your portfolio? Are you filing for all the tax deductions you are eligible for? Every move you make will take time to research and implement. You can gain back time in your day by having simpler finances.

Who wants to manage the complexity in retirement anyway? Retirement is a time to kick back and relax. You certainly don’t want to spend too much time making sure all of your accounts are being managed properly. If you reduce the number of accounts necessary to make your finances tick you will have more time to pursue what’s truly important.

David Ning is the founder of MoneyNing.com .

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Financial Simplicity Should be a Retirement Priority originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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