Will Having a 529 Plan for My Child Impact His/Her Eligibility For Financial Aid in the Future?
It will be factored in when considering financial aid eligibility. Unfortunately, having a 529 Plan may affect your child’s eligibility for financial aid in the future. If a parent owns the account, in 2016 the financial aid office will take 5.64% of the account’s value (and all other non-retirement investment accounts) into consideration when determining how much financial aid a student can receive. Continue reading...
How are Social Security Benefits Computed?
Social Security retirement benefits are computed by finding the average monthly income of a worker during the highest-earning 35 years of employment, and then it plugs that amount into a formula for to determine their full benefit at Normal Retirement Age (NRA). A person may then choose to take benefits before or after NRA, with applicable reductions or additions. There are different equations for spousal benefits, survivor’s benefits, and maximum family benefits. Continue reading...
What is Dividend Policy?
Different companies have different approaches to dividends: whether to pay them, whether it’s a fixed amount in the budget or dependent on the kind of expenses they incur each year. These and other considerations make up what is known as a company’s dividend policy. Companies may have a different phases in their development that will lead them to adopt different dividend policies along the way. As a young company in the Growth category, the dividend policy will most likely be not to distribute any dividends. Continue reading...
What is a Bank Statement?
A Bank Statement is a report issued to an account holder on a regular basis, such as monthly, which contains the account balance as of the date of the report and usually a history of transactions for the period. A Bank Statement will usually be mailed, either by the postal service or electronically, to a banking customer every month. The statement will represent a summary of the bank’s records for the recent month on a particular account, and will probably show all transactions posted to the account, along with the ending balance of the account as of the date of the mailing. Continue reading...
What is the commodity futures trading commission?
The Commodity Futures Trading Commission (CFTC) is an independent government agency that regulates the futures market. Futures are not considered securities, so the CFTC has jurisdiction over such exchanges while the SEC does not. The CFTC is the regulatory authority for the futures trade. This includes futures on currency, indexes, and stocks. Futures are not technically considered securities, because a security is defined as a contract that depends on the performance of a third party, while futures contracts only depend on two people. Any options that stem from futures are considered securities, however. Continue reading...
What is Chapter 11?
Chapter 11 is a type of bankruptcy filing a company can make to give itself time to reorganize and hopefully continue business. There are different types of bankruptcy filings a person or business can make, depending on how overwhelming their debt load is. Chapter 11 is a kind of bankruptcy filing that allows the corporate leadership to stay in control of a company while trading freezes on their stock and the company and its debts are reorganized. This is called “debtor in possession.” Continue reading...
How Often Can I Contribute to My 401(k)?
Generally 401(k) contributions will be automatically deducted from payroll. Contributions to a 401(k) account are generally taken out of compensation during payroll, before taxes are withheld. For example, if you receive monthly paychecks, the contributions into your 401(k) occur monthly. Some employers may be more flexible and allow employees to make deposits when it is convenient, or to adjust their contributions at year-end, but larger employers will probably not have time for that, unless it is built into the plan interface in a way that makes it convenient for the payroll department at the sponsoring place of employment. Remember, any contributions must be within the limits allowed by the plan. Excess contributions must be corrected promptly. Continue reading...
What are 'Liar Loans'?
Liar loans are a term that refers to loans or mortgages that were granted with little or no request for qualification documentation, such as proof of income. On certain low-documentation loan programs, such as stated income/stated asset (SISA) loans, income and assets are simply stated on the loan application. Then there are still other loan programs known as no income/no asset (NINA) loans, where the applicant essentially does not have to provide any proof of eligibility. These types of loans opened the door for fraudulent lending practices, which ultimately bankrupted several mortgage companies during the 2008 financial crisis. Continue reading...
What if My Long-Term Care Insurance Doesn’t Pay for My Expenses?
Most long-term care insurance policies are designed to mitigate the cost of long-term assisted living care, not to cover the entire daily cost. Retirees should plan to absorb some of the cost themselves, assuming that daily supervised care is needed. That being said, if you own a long-term care insurance policy and the insurance company is refusing to pay benefits for the care you need, then you may have a fight ahead of you. Continue reading...
What is Chapter 10?
Chapter 10 is a bankruptcy filing available to smaller corporations where they agree to have their management replaced to oversee a restructuring, and they also agree to have their debts repaid within three years. If a company does not have more than $2.5 million in debt, they may be able to file Chapter 10 bankruptcy. The company and its attorney will put together a plan for reorganization and explain how the plan will ensure that the company meet its obligations in the future. Continue reading...