• David H. Kinder, ChFC

Why College Planning is a BY-PRODUCT of the Planning I Do


A 2015 Survey Of 2,000 Parents Indicated:


  • 53% Would Rather Use Retirement Savings To Pay College Costs Than Have Their Kids Take Out Student Loans.

  • 51% Would Be Willing To Get A Second Or Part-time Job.

  • 49% Would Delay Retirement And Work More Years.

  • 79% Said They Were Saving Something For Their Kids’ College Costs, But Were Using The Wrong Accounts [Which Lowered Maximum Financial Aid Opportunities].


(Note: lots of inaccuracies in the source article - which I posted in the comments, but the attitudes were what mattered.) https://www.fa-mag.com/news/paying-for-tuition-trumps-retirement-savings--survey-finds-21245.html


But I don't believe in LEADING with college planning as my primary offering. There are plenty of agents that DO... and I don't discourage what works, as long as they can prove for their clients that what they do... works.


Here's why I don't lead with the idea of "college planning":

  1. The FAFSA (Free Application for Federal Student Aid) takes household INCOME primarily into account more than your assets in determining your EFC - your Expected Family Contribution, in regards to being eligible for aid, loans, etc. Yes, your assets DO play a PART, but it's not as big of an issue as your actual earned income.

  2. Focusing on "college funding" is a "planning to spend" mentality compared to lifetime prosperity and growing economic capacities. It's simply one facet of what you want to accomplish in your planning, and it short-changes your long-term financial potential, if we LIMIT your focus to just planning to write those big checks.

  3. Life insurance and annuities (and IRS regulated retirement plans) are EXEMPT assets from the FAFSA reporting requirements. If something is exempt, why would we want to LIQUIDATE those assets to pay for college when you can keep them "off the radar of the FAFSA" and increase your potential aid or loans?


What is the present value cost of a college education? And if you left that money in the account, what would that have possibly grown to?


Let's assume a 4 year degree program has a cost of $50,000 out of your pocket - on top of any other aid you receive.


If you left that $50,000 in your accounts (regardless of where it is) and it grows at 6% for another 20 years until retirement... how much would that be?


$160,356!!!


Is that money better off in YOUR pocket... or in the college's pocket?


  • How many children do you have?

  • What if they need a 5th year?

  • What if they need graduate school or other training, such as law school or medical school?

  • What would the lost opportunity costs be if you spent that money and you didn't have enough money for your retirement?


Look at those statistics above again.


What if...

  • You didn't have to SACRIFICE yourself and your retirement for your children's education?

  • What if the planning you did, could maximize financial aid opportunities AND allow you to help as you want - without requesting a hardship withdrawal or increasing your reportable annual income to the IRS?

  • You didn't lose the money you were planning to help your children with their education with, could keep it, and use it to have a FAR more efficient retirement income plan that's off the radar of the IRS entirely?


So no, I don't "lead" with college planning, but comprehensive college planning is AUTOMATICALLY INCLUDED in the planning I do.

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David H. Kinder, ChFC® is regulated by the California Department of Insurance as a life, accident & health insurance agent (CA Insurance License #0E54187)​.  This communication is strictly intended for individuals residing in the state(s) of CA. No offers may be made or accepted from any resident outside the specific states referenced until proper state insurance licensing and company appointments are secured for that given state. David Kinder Insurance and Financial Solutions is the marketing name for David H. Kinder, ChFC® and is not affiliated with any other company.  Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Guarantees do not apply to the performance of any particular index option on fixed indexed insurance contracts, or on projected dividends on participating insurance contracts.  Not all recommendations necessarily require insurance product purchases. Not all products are appropriate or available for all situations. Results are not guaranteed and are subject to individual situations and circumstances. Listing company client access links under the "Client Access" menu does not constitute any endorsement, filing, or approval of this website or its content by such listed companies.  Client access links are provided for client convenience only.

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He does offer general investment information for educational purposes and may propose alternative financial strategies that do not contain or include securities. He does also discuss the pros and cons of various kinds of accounts (such as IRS Regulated Retirement Plans) and is considered incidental advice surrounding various strategies and solutions, but does not necessarily constitute advice on the underlying securities.  

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