College Funding – Paying for Your Child’s Education

The potential to earn a decent living is greatly enhanced by earning a bachelors degree or higher. Those who have it will most likely flourish and those who don’t…

To attend an in-state public college for the 2012-13 academic year, the average overall cost (or “sticker price”) for students who don’t receive any financial aid rose 3.8% to a record $22,261, according to a October 2012 college board report. Tuition accounted for about half of that increase. Public university tuition and fees alone rose 4.8% to $8,655. In addition, higher dorm, cafeteria, books and other expenses added significantly to the overall increase.

Over the years college tuition costs have grown to new heights.

10 yr college cost increase

While about two-thirds of full-time students receive grants or federal tax breaks, many are likely to have to foot more of the bill themselves.

What parent wouldn’t want to see “PAID IN FULL” stamped across their child’s college tuition bill? An insurance professional can help you plan for your child’s education expenses.

College costs are on the rise and are expected to continue climbing. For instance, for a baby born today, the costs will be more than three times current rates when they enroll in college.1

Life Insurance Can be Key
Life insurance can be vital in helping fund your child’s education – whether you’re there or not. Life insurance offers certain tax advantages. In the event of your death, your family can choose to use the income tax-free death benefit to pay education costs. And with some types of life insurance, you can take loans against your policy without tax penalties.2

Be sure to take into account these additional features that may be available with certain types of life insurance:

• Guaranteed cash value, so you know a certain amount of money is available
• Access to your money, so you can use it for tuition and other educational expenses
• Premium waivers due to disability 3

Does Insurance Count as an Asset on Financial Aid?
Cash-value life insurance does not affect federal financial aid eligibility.
Financial aid is available for students who demonstrate financial need in the form of federal Pell grants. Qualifications for financial aid depend not only on household income, but financial assets as well. The U.S. Department of Education considers most cash, savings and investments as assets, but insurance policies typically have no influence on financial aid eligibility.

Insurance policies do not count as assets for federal financial aid purposes even if they carry cash value. While term life insurance, health insurance and other insurance policies usually have no cash value, many whole life insurance policies gain value over time. Policy-owners gain cash value in these types of insurance policies, but regardless of the ‘cash-in’ value of a permanent life insurance plan, insurance policies are not countable assets with regard to federal financial aid.

Considering Term vs. Permanent Insurance
If you simply need to pay for your child’s college expenses in the event of your unexpected death, consider term life insurance. Choose the length of time you need coverage and the amount of death benefit you need.

Talk with your AIPS financial representative about how you may be able to use permanent life insurance to help with college expenses. You may be able to take withdrawals or loans against the policy’s cash value, which can continue to grow tax-deferred.

1 U.S. Bureau of Labor Statistics and

2 Assumes the contract qualifies as life insurance under section 7702 of the Internal Revenue Code (IRC) and is not a modified endowment contract (MEC) under section 7702A. Most distributions are taxed on a first-in/first-out basis as long as the contract meets non-MEC definitions under section 7702A. Loans and partial withdrawals from a MEC will generally be taxable and, if taken prior to age 59½, may be subject to a 10% tax penalty.

3 Disability waiver of premium qualification is not guaranteed and is subject to availability by carrier. The waiver of premium rider may be included in any life insurance policy you choose to purchase. It simply states that in the event you become disabled while you own your policy…as long as you are disabled for a minimum of 6 months…the life insurance company will waive your premiums for as long as your disability continues or in some cases to age 65.

Feel welcome to contact us for a complimentary review of your personal situation. AIPS does not provide legal or tax advice, please consult your tax and legal advisors regarding your individual situation.

Posted by Troy Barrow, LUTCF – Troy is an independent Agent practicing professionally for six years and is the owner of Arlington Insurance Planning Services, licensed in the States of New York and New Jersey. You may contact Troy at 646 580-5189 or


The Best Ways to Budget for Groceries


If you don’t have a grocery budget or a shopping plan, you could find yourself spending far more on groceries than you can afford. Grocery budgeting does not require that you eat inexpensive noodle soup for every meal, nor does it require that you cut out fresh produce from your diet. Watch your spending and shop strategically to minimize your costs and maximize what you get.

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Data and information is provided for informational purposes only, and is not intended for solicitation or trading purposes. Please consult your tax and legal advisors regarding your individual situation.

Posted by Troy Barrow, LUTCF – Troy is an independent Agent practicing professionally for six years and is the owner of Arlington Insurance Planning Services, licensed in the States of New York and New Jersey. You may contact Troy at 646 580-5189 or

What’s more important, Time? or Timing?

Image         Why Is Time So Important When it Comes to Saving?

 A $1 million nest egg by age 65 — it’s a nice thought, but such a nest egg will not happen magically. Accumulating assets for retirement takes time and discipline. What are the keys to retirement security? First, it’s important to understand that your savings accumulation success  depends on having a firm financial foundation in place, so in addition to accumulating assets you should have plans in place to protect or replace funds due to advents of risk, like disability or even loss of life. 

Most successful retirement funds are built by making regular payments over time. Simply put, the sooner you begin to save for future financial needs, the better.

 Can You Afford Not to Save?

Time can be one of your most powerful accumulation allies. To illustrate this point, consider the following hypothetical example. Your objective is to accumulate $1 million for retirement by age 65. If you are 25, you will need to make at the beginning of each year an annual contribution of about $6,100, assuming a 6% return. That’s about $500 per month. However, if you wait until age 45, you will need to save over $25,000 a year or approximately $2,100 per month to reach your goal. (This is a hypothetical illustration and is not intended to project the future performance of any particular product.) Although this example is basic, it proves a valuable point: postponing saving until later in the game will force you to dramatically increase your saving habits. This is a difficult task, even for the most disciplined people.

 Where Do You Begin Building a Retirement Portfolio?

Pay yourself first. If you do not currently participate, the first place to begin accumulating savings for retirement is your employer-sponsored qualified retirement plan (401(k), 403(b), etc.). Utilizing your employer-sponsored qualified retirement plan presents a tremendous opportunity for you to get a jump on retirement. Some employers will match employee contributions on a dollar-for-dollar basis, while others may contribute a smaller percentage. Either way, taking advantage of the current tax deductions and the ongoing tax-deferred compounding of earnings makes smart investment sense.

 You can also invest up to $5,5001 in an IRA in 2013. If you’re 50 or older, that amount is $6,500 for 2013. If you do not currently participate in your employer’s qualified retirement plan and if you meet certain income limits, your contributions to a traditional IRA are usually fully tax deductible. This deduction will reduce your taxable income and your current income tax bill. Alternatively, the Roth IRA may be the right choice for your retirement funding. Some advantages of a Roth IRA include:

 • Tax-free accumulation and an entirely tax-free distribution, provided that five years have passed since the first year in which a contribution was made, and you are over the age of 59 ½

• Eligibility for contributions at a higher earned income level compared to traditional IRAs

• No mandatory withdrawals during your lifetime

• The ability to continue making contributions after age 70 ½ if you’re still earning income

• IRS penalty-free withdrawals in a variety of circumstances (same with traditional IRA)

• The ability to contribute to the Roth IRA even if you already participate in an employer-sponsored plan

 If you do participate in your employer’s qualified retirement plan, your deduction for your IRA contribution may be reduced or eliminated depending on your annual adjusted gross income. Even if your contributions are not deductible, you should still consider making a yearly contribution because the money earned in the account compounds tax-deferred.

Typically, withdrawals of earnings will occur in retirement, when you will probably be in a lower tax bracket. Depending on the type of IRA, withdrawals may be taxable and, if you are under age 59 ½, may be subject to a 10% tax penalty.

 How Do I Start Funding for Retirement?

Consult your advisor or if you’re in NY or NJ, find and contact us if you don’t currently have one and make the first step towards your future financial security.


Information provided has been prepared from sources and data we believe to be accurate, but we make no representation as to its accuracy or completeness. Data and information is provided for informational purposes only, and is not intended for solicitation or trading purposes. Please consult your tax and legal advisors regarding your individual situation.


Posted by Troy Barrow, LUTCF – Troy is an independent Agent practicing professionally for six years and is the owner of Arlington Insurance Planning Services, licensed in the States of New York and New Jersey. You may contact Troy at 646 580-5189 or

Working Women, Look to the future…

Successful Professional Woman

Working Women:

Make Sure the Future Is Taken Care Of…

We all find it hard to plan for the long term, yet women face some unique challenges when it comes to planning for the future. Everyone needs to address the reality of living longer – and spending more years in retirement – but females tend to live even longer than their male counterparts. On top of that, there are valid reasons why some women may not be in a position to properly prepare for their financial future. To begin with, many women are still employed in settings that don’t offer retirement plans to employees. Also, many women leave the workforce to take care of their family for some time. They may have to work even harder and longer later in life to make up for the resulting “gaps” in income and pension coverage.

Make Saving for Retirement a Priority

The importance of preparing for the financial future applies whether you’re a single or married woman. The good news is that it’s never too late – or too early – to begin. If you are currently working, see how much you can afford to set aside each month. It is important not to fall into the trap of postponing retirement planning or leaving it solely up to a spouse.

Any financial planning decisions also should take into consideration what would happen in the event of divorce or widowhood. Although no one likes to think about these possibilities, the odds tell us that we must. According to the Women’s Institute for a Secure Retirement, nearly 30% of older (65+) single women – those who were never married or were divorced or widowed – are poor or near poor.[1]

 Timing Is Everything

There are all kinds of financial products on the market that can help you accumulate funds for the future. One very important and popular product is fixed annuities, which also offer tax-deferred growth. Fixed annuities are popular in helping women address their needs. There are several solid reasons for this choice.

Fixed annuities are flexible, tax-deferred vehicles that can be used to help achieve long-term financial goals and provide a source of retirement income. There are several distinct advantages to investing in fixed annuities. With a deferred fixed annuity, the money you put in accumulates tax-deferred, which means that taxes are paid only when you withdraw the money, not as your earnings grow. (Any withdrawals made prior to age 59 ½ may be subject to a 10% IRS penalty tax.)  This may allow your money to accumulate much faster than it might in a comparable, currently taxable investment.

In addition, a fixed annuity can provide you with flexibility. With many fixed annuities, you can add to your policy as your finances permit, and you can even arrange for systematic contributions to be deducted directly from your checking account. Lastly, many fixed annuities offer a guaranteed death benefit feature that may allow the annuity proceeds to be passed on to your loved ones outside of your estate. Similar to this in some regards is the use of permanent life insurance which offers many similar benefits which can add versatility to your game plan in dealing with the current and future economic climate.

Take Control of Your Future retirement in reach

Fixed annuities are designed to help you accumulate money for your retirement, but they can also help meet your needs during many stages of your life. For women – who are at greater risk for poverty during their retirement years – it is especially crucial to start planning now. Fixed annuities can help provide the peace of mind and security you need for the future – so you can concentrate on today.

For more information on how fixed annuities and life insurance can help you prepare for your retirement, please contact Troy Barrow, Arlington Insurance Planning Services at (646) 580-5189 or

[1] Impact of Retirement Risk on Women, Women’s Institute for a Secure Retirement in conjunction with the Society of Actuaries, October, 2006.