Money Talks Blog by william_lako
529 Plan Funds When Your Child Receives a Scholarship or Decides Not to Attend School
August 26, 2013 03:10 PM | 46035 views | 0 0 comments | 1632 1632 recommendations | email to a friend | print | permalink

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In Case of Emergency
by william_lako
September 10, 2012 09:50 AM | 2296 views | 0 0 comments | 97 97 recommendations | email to a friend | print | permalink

As September is Emergency Preparedness Month, I wanted to focus on some tools to help you keep your life organized. Should the spouse who handles a family’s financial affairs die, the surviving spouse should be able to refer to a book or document and easily find vital personal and financial information during a critical time. By documenting your records and where original files are located, you can also broach the subject of your family’s finances with elderly parents or adult children in a non-threatening way.

There are several commercially available products to help you stay organized. “Life Organizer: The Essential Record Keeper and Estate Planner” is a ring-bound book by Nancy Randolph Greenway that walks you through the process of documenting your financial life with an emphasis on estate planning. The organizer is divided into eight sections, including, Family and Beneficiaries; Property and Investment Records; Insurance; Retirement and Business; My Will, Trusts and Gifts, and Resources and Advisers. offers organizer binders with more than 30 sections to organize your family’s personal records and financial information. The binders contain plastic sleeves for document storage. It also has practical tips and suggestions for organizing your important papers and information outside of the organizer, such as child identification information. offers several organizer system options to fit your family’s needs, including lockable, heat and water resistant cases, portable travel versions, as well as, digital versions stored on an encrypted USB flash drive.

Regardless of what system you use, in an emergency, you or your loved ones should be able to grab your personal records organizer and document locator and have almost everything you would need to get your affairs in order.

William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.

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Insurance Concerns When You Send Your Child to College
by william_lako
August 30, 2012 03:07 PM | 1959 views | 1 1 comments | 104 104 recommendations | email to a friend | print | permalink

The adorable four-year-old you used to read to every night is now in college. Naturally, you are worried if he will be able to handle living on his own and whether he’ll keep up his grades to maintain his scholarship. With all the worries a parent has, insurance issues may be far down the list. However, they should be dealt with before the need for insurance arises.

College students pack their dorms with expensive personal belongings, e.g., computers, TVs, game systems, etc. If something is stolen, your homeowners' insurance personal property coverage should extend to your child’s dorm room. However, you should check your policy closely for limits on children’s age or coverage. Generally, policies limit you to 10% of the coverage of your in-home possessions. So if you have $150,000 in insurance coverage for in-home possessions, your child’s coverage would be $15,000. The deductible applies as if there were a loss at your home.

If your student lives off-campus in an apartment or house, be aware that the landlord’s insurance only covers the damage to the property. Renter’s insurance in your child’s own name is needed to protect personal property.

Thanks to the Patient Protection and Affordable Care Act, your child can remain on your health insurance, as a dependent until age 26. You should be aware if your insurance carrier considers the college health care center out-of-network—if the health care center accepts your insurance at all. You may want to check if your employer plan will allow you to move your child to a preferred provider organization network. Generally, they have larger networks of doctors and care facilities. Additionally, if the student travels while in school, be sure their health insurance coverage extends to overseas travel.

Finally, if your child takes a car to college, your auto premium can change, depending on the college’s location, the parking provided, and the amount of claims the insurer has paid in that location. Notify the insurance company of your child’s new address, as states differ in minimum coverage requirements.

William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.

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August 31, 2012
Wow--I didn't even consider calling my car insurance company. Thank you!

Avoid Using Your 401(k) to Fund Your Child’s Education
by william_lako
August 24, 2012 10:30 AM | 2487 views | 0 0 comments | 96 96 recommendations | email to a friend | print | permalink
While you can use your 401(k) to pay for a college education, you really shouldn’t. Your 401(k) was designed to save for retirement. Your child can borrow money for college. You cannot borrow money for your retirement.

Generally, if you withdraw funds from your 401(k) before age 59½, you will owe a 10% early withdrawal penalty, in addition to the income taxes you will owe on the withdrawal. Let’s say you withdraw $3,000. Subtract the 10% penalty of $300, the 28% federal income tax of $840, and then Georgia state tax of 6% of $180. Your $3,000 should cost you $1,320.That is almost reason enough not to withdraw early.

If you need to save for college in a retirement vehicle, consider using a Roth IRA. Withdrawals used to pay qualified college expenses are an exception to the 10% premature distribution penalty on withdrawals made before age 59½. Of course, there are several other savings vehicles designed specifically for education.

If you cannot avoid tapping your 401(k) to pay for college, you may want to consider a plan loan. Most 401(k) plans will let you borrow as much as 50% of your vested account balance, up to $50,000. You will need to check with your plan administrator to determine if loans are allowed and if there are any restrictions. You repay the loan, with interest, from your paycheck. Most plan loans carry a favorable interest rate, usually, prime plus one or two percentage points. You typically have up to five years to repay your loan. However, some plans require that you repay the loan immediately if you leave your job. Additionally, any outstanding loans at employment termination are considered taxable distributions, which means federal and state income tax will be due, as well as the 10% early withdrawal penalty if you are younger than 59½ .

Be warned: your retirement earnings will suffer as a result of removing funds from a tax-deferred investment.


William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.
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Saving for College and Retirement
by william_lako
August 15, 2012 01:36 PM | 2173 views | 4 4 comments | 98 98 recommendations | email to a friend | print | permalink

If you’re like most families, the question that keeps you up at night is “How am I going to save for retirement and my children’s college education?”

Finding that balance isn’t easy; however, you have to remember: You can borrow money for college, but you cannot borrow money for retirement.

Postponing saving for retirement means missing out on years of tax-deferred growth and can result in playing a near-impossible game of catch-up. When calculating your retirement funds, remember to include all sources of retirement income, including employer pension plans and Social Security benefits.

As your first step, I suggest you thoroughly examine your needs: Is it more important that you travel when you retire, or that your child attends an Ivy League school? You may have to reprioritize your goals.

If you cannot afford to save for both goals, your second step is to consider compromises like:

  • working longer or having a stay-at-home parent join the workforce;

  • Looking for a better-paying job or consider a second job;

  • Seeking out more aggressive investments—but beware of the risks;

  • Investigating less expensive colleges or second-tier private college that may offer better programs than expensive, elite colleges, or

  • Consider your child take out college loans.

Some parents may find it difficult to accept, but the reality is a majority of college students finance a portion of their education with student loans.Two-thirds, or a little more than 65%, of four-year undergraduate students who earned a Bachelor's degree in 2007—2008 borrowed money for school between Stafford, Perkins, state, college and private loans. Six in 10 students believe that it is better to take out loans to pay for school, as they view attending college as an investment in their future.

The third step is to re-evaluate your plan from time to time as your circumstances and priorities change. Remember, the important thing is to earmark a portion of your present income for both goals and do the best you can.

William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.

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August 24, 2012
What does one do with a degree in Jazz Studies????

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