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Month: March 2014

myRA: A New Way for Americans to Save for Retirement

Posted on by kdarnell

In his State of the Union Address on January 28th, 2014, Barack Obama introduced America to a new way to save for retirement: myRA, short for My Retirement Account. A direct quote from his State of the Union:
” Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k) s. That’s why … I will direct the Treasury to create a new way for working Americans to start their own retirement savings: myRA.”
— President Barack Obama, State of the Union, January 28, 2014

As with any form of investing, it is important to understand the aspects and features of the funds you are putting your money into. I hope to provide you with a little more information about myRA in this post. It’s no secret that saving for retirement is essential for every American.

What is myRA?

My Retirement Account was created for Americans who do not have an employer sponsored retirement program. As you may or may not know, many firms, companies, and organizations have a 401(k) or 403(b) program set up for their employees where the employee can put a portion of their paycheck into the account to save for retirement. Some companies will even match a portion of what the employee puts in. However, many Americans, especially those working low income jobs, still do not have accesses to these retirement savings accounts or simply cannot afford to contribute. myRA has been put in place to close this gap. myRA is set up just like other retirement savings plans. An employee can elect to have a portion of their paycheck deposited into the account every month. It’s a simple way to get a head start on saving for retirement.

What are the Benefits of myRA?

• Saving Money for the Future
This one is a no brainer. Any opportunity that an employee has to save money should be taken. myRA was created in the hope that Americans who are currently not saving money for their retirement will begin to do so. As we are beginning to see, a social security check is not going to be enough to get the average American through retirement.

• It’s Easy to Understand
The myRA was created to be easy for working Americans to understand. An employee can make contributions as low as $5 every month. The account can be moved when you switch jobs, and it can be moved into different retirement accounts such as an IRA whenever you would like. It offers an easy and flexible way to get started on saving for retirement.

• It Offers Safe Investments
The money that you put into your myRA account are invested in treasury securities. Treasury securities are backed by the full faith and credit of the United States, meaning that these investments are very safe. The only pitfall to this is that treasury securities do not offer much of a return, so owners of myRA accounts will not see as much growth in their savings as they would with other more risky retirement accounts. However, the myRA is a great way to get started saving for retirement especially for low income Americans.

• Anybody Can Afford It
The myRA account can be started with an initial investment of $25. From there, Americans can make deposits as little as $5 straight from their paychecks into the account.

How Can I Enroll in the myRA Program?

Details are still forthcoming. Right now the Treasury Department is still working out a few different aspects of the program. By the end of 2014 Americans should expect to be able to enroll in the program online.

A Few Other Details

There are a few rules put into place for the myRA account that Americans should be aware of. The myRA was created for low income Americans. However, a person earning wages up to $191,000 will be able to enroll in the program. The myRA account is allowed to accumulate a maximum of $15,000 over 30 years. Once either one of these limits are met the owner of the account will have to put the money into a more traditional retirement savings account.

Powercat Financial Counseling is here to help!

Retirement can be a daunting thought for many people, especially when you are young. It is never too early to start saving though! Here at Powercat Financial Counseling we strive to help students at K-State use their money wisely. If you have any questions about the myRA account, or saving for retirement in general please feel free to sign up for a counseling session. We would love to meet with you.

Tyler Pemble
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Ways to Make Money in College

Posted on by kdarnell

1. Sell your plasma
Want to earn about $250? Well that’s how much you can make in total after 5 trips! Thereafter, it’s $20-$37 for each weekly trip. So if you aren’t afraid of needles, go for it! Go to www.cslplasma.com for more information from the Manhattan plasma donation center.

2. Sell stuff you don’t need
Do you have textbooks from a few semesters ago that aren’t doing you any good other than collecting dust? Make use of ecommerce sites like eBay, Amazon and Craigslist and sell them along with items such as gently used clothes, shoes and furniture. An alternative is to sell back books to Varneys Bookstore before finals week!

3. Participate in research studies and clinical trials
Are you comfortable with being asked questions and being studied by people in lab coats? Inquire about research studies being conducted by the many programs at K-State. A good place to start would be the Psychology Department that can be found in Bluemont Hall.

4. Get a part-time job
Make use of the Career and Employment Services website. It’s a great resource to find local jobs and internships. If you would like to make a little more than $7.25 an hour consider working for tips at a restaurant or bar.

5. Baby/pet-sit
If you have some time on your hands and you like pets or kids then this might be the right opportunity for you! These days, babysitters make upwards of $15 an hour. There are people who also need house sitters for when they take trips away from home, so ask around.

6. Take online surveys
Companies like Amazon and many others are in need of people to complete their surveys! You won’t make much but it does add up. Some surveys can be interesting and fun, too!

7. Recycle
If you support the Green Movement and you consistently recycle, why not get paid for it? Instead of using your campus-sponsored service visit your local recycling center and trade in your recyclables for some money.

You won’t become filthy rich with these tips but they are simple ways to have a little more $ in your pocket!

Gerald Mashange
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Preparing Your Budget for Spring Break

Posted on by kdarnell

In case you missed PFC’s “It’s Spring Break NOT Spring Broke” event yesterday, here are some tips to help you stick to your budget during spring break. Start planning what you will do, how you will get there, what it will cost, and any additional spending money you will need for it.

Compare flight prices in an incognito browser (aka private browser). An incognito browser won’t release your IP address to the site, which can prevent sites from raising prices on a second visit in order to pressure customers into buying too quickly or without further research. In Chrome, click the menu button on the top right. In Firefox, click on the drop down menu in the top left. On Safari, click on Safari in the top task bar. And in Internet Explorer, click on the safety tab on the menu. Some sites to look at for comparing travel prices are:

  • http://www.kayak.com/
  • http://www.expedia.com/
  • http://www.priceline.com/
  • http://www.amtrak.com/
  • http://www.greyhound.com/
  • http://us.megabus.com/ (though there’s no stations in Kansas, it can help with a connecting trip)

Oftentimes, taking a bus, train, or driving will be largely cheaper than taking a flight, but will take longer. Consider cutting costs by sacrificing a little time. Also keep in mind that prices tend to go up as the date of the trip gets closer. Getting a jump on buying tickets can save you a lot of money.

Compare hotel prices. Most of the travel sites listed above also offer hotel comparisons and discounts. Make sure to research the cost it would be to buy them separately before assuming that the bundle is cheaper. http://www.hotels.com/ is a good site to compare prices. They have deals every now and then for certain hotels and offer a punch card system for booking through their site where you get a free stay after ten nights booked. Since a hotel can sometimes just be a place to sleep at night, consider booking a lower-cost hotel instead of one that has a lot of amenities.

Make SMART goals to save up for the trip. They should be Specific, Measurable, Attainable, Realistic, and Timely. Determine how much you will need for the trip and set a specific amount of money to put away for a specific period of time (each month, each paycheck, etc…), that can fit in your budget and get you the amount needed in time. This will require a good budget to know how much you can afford to set aside each month. Consider stashing away any holiday or birthday money towards it as well.

Christyne Stephenson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Everything You Need to Know about the FAFSA

Posted on by kdarnell

What is the FAFSA?

The FAFSA, or Free Application for Federal Student Aid, is a form that should be completed annually by any college student seeking student loans or grants for the next school year. To get any kind of federal financial aid, you must file the FAFSA. It will determine how much financial need you have for student loans, grants, and even work study. Federal student loans can be either subsidized or unsubsidized. Subsidized loans are loans that the federal government subsidizes for you while you are a student. That means that the interest on the loan is paid for you. Unsubsidized loans have interest that accumulates while you are in school. Grants do not need to be repaid. They are basically free money given based on need. Work study is given based on need as well. You work on campus part-time and get paid with that money.

Who is it for?

Subsidized loans are available for undergraduate college students with financial need. Unsubsidized loans are available for undergraduate and graduate college students with no requirement to show financial need. You must show financial need in order to qualify for grants and work study as an undergraduate and graduate student. You must also be at least a half-time student to receive federal financial aid.

When should it be done?

Submit your FAFSA application by March 1st for K-State because it is their priority deadline. That is when certain grants will be awarded to needy students. The sooner you submit your application, the better. Keep in mind that every school has a different priority deadline so make sure you know when it is. If you miss the priority deadline, it’s not too late! Go ahead and file your FAFSA as soon as possible.

Where to start?

Complete your FAFSA at https://fafsa.ed.gov/. If you have not completed the FAFSA previously, you and your parents may need to register for a Federal Student Aid PIN. You can do so at pin.ed.gov. Remember that pin and do not share it with anyone. It will serve as your electronic signature at the end of your application.

If you are a dependent of your parents’, then you will need their information in addition to yours. You will need social security numbers, 2013 federal income tax returns, bank and brokerage statements, and your PIN numbers.

You need your tax information for the FAFSA but if you have not done your taxes yet, then you should still submit it with estimates first. You can go back to it later and import your tax information directly to your FAFSA using the tax filing pin you created when doing your taxes.

Renewing your FAFSA

If you have completed the FAFSA before, it will be easier to fill it out now. Your information from prior years will be transferred, then you can just update your information with new tax return information, etc. You can use the import tool to retrieve your income tax information.

Melissa Daovannary
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc