Public Service Loan Forgiveness ... Do You Qualify?
Do you work for the CDC? VA? Emory? A non-profit?
Do you still have federal student loan debt?
Have you previously tried getting your loans forgiven through the PSLF program and failed?
Good news!!
In October 2021, exciting (and temporary) changes were made to the U.S. Department of Education’s Public Service Student Loan Forgiveness Program, significantly increasing the number of federal student loans that qualify for forgiveness. There are some technical requirements that must be met: a particular type of loan, making a set number of payments (120), 10 years of work service and working at a qualifying institution.
What is the Public Service Loan Forgiveness Program?
According to the Department of Education website, “The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”
What qualifications are needed for the federal student loan forgiveness program?
Your loans must be federal student loans … NOT private. ** You can determine if the loan is a federal loan if it begins with “Direct.”
You have to make 120 qualifying monthly payments
Work for a qualifying employer (a nonprofit or government institution)
Work full-time ( at least 30 hours a week)
10 years of work service with a qualifying employer
Check out this PSFL tool on the federal student aid website to help determine if you qualify.
What changes have been made to the PSLF?
Good news - if you did not qualify for PSLF before, you may qualify now! This program began in 2007, and although the ‘qualifying employment’ requirement has not changed, the program now allows all federal student loan payments to be counted toward the PSLF program. Previous disqualifying factors, such as an ineligible loan type or repayment plan, will no longer automatically make you ineligible.
Several clients have said, “I consolidated my loans years ago, so I don’t think I am eligible for forgiveness.” Even if you consolidated your loans when you began making your initial loan payments, these loans may still be eligible for forgiveness if they are federal student loans.
When should I get started?
This is a temporary expansion, so you will need to have your paperwork and applications submitted by October 31, 2022. The sooner you get started the better.
How to get started?
Creating an account at www.studentaid.gov is definitely your best first step. The account will be established within 3-5 days. Once you gain access to your account, your loans will be listed and you will be able to determine the number of payments made. In addition, there will be an eligible employer database that you can search.
How can we help?
This program has been changed significantly, and we understand there are a lot of qualifications and grey areas. Where you may not have qualified under the previous PSLF program, the temporary expansion could accept your application and see ALL of your debt wiped out! This is where we can help. If you are unsure of the process and/or if you qualify, we can work with you to identify next steps and walk you through the process.
Here’s what you’ll need:
Student loan documents - the latest statement or access to your federal student aid profile
Your latest income tax return
Name of your employer
Work service history
We can go through this information and process together. If you don’t qualify, we can identify why you don’t qualify and how you can go about qualifying in the future. We can help you consolidate your loans (if needed). And finally we can help you complete the application process.
If you have been putting this off, don’t worry, we are here to help. Set up a Zoom meeting (or consultation) here:
How Managing Your Money Can Make You Happy
Does managing your finances bring you and your family happiness?
You are probably thinking: Josh are you insane? I do my best NOT to think about my finances. Discussing finances brings on stress and tension with my partner, not happiness.
Josh, what is your definition of happiness?
Defining Happiness
Happiness is the joy felt while pursuing one’s full potential.
Let’s break it down a bit, starting from the end of the sentence.
You can’t reach your full potential, if you haven’t defined your goals.
“One’s full potential” is something that we all want to achieve, to be our best self. We want to be engaged in doing things that makes us shine our brightest. It is what all of our short/mid/long term goals should add up to.
“Pursuing” happiness is not something that is given to you. You have to pursue it. You have to work for it. In the U.S. Declaration of Independence it says “life, liberty and the pursuit of happiness”. There is “work” involved and work is not easy. Often people don’t achieve it, it’s ephemeral in their minds.
“Joy” is something that we all want to experience… a big smile from our child, a loving embrace from our partners, shared laughter with friends.
a common pitfall I see with henry’s
Many of the HENRY’s I meet are not intentional with their money. Being financially comfortable, lulls them into a false sense of financial security.
a “henry” Is
a High Earner Not Rich Yet
As a result, they aren’t making progress towards their goals. Often they haven’t even defined their goals. And if you haven’t defined your goals, you can’t reach your full potential.
HENRY’s often feel confused and let down when they take stock of their lives. They don’t understand how despite their high income, their growing investments and net worth, they still feel something lacking. At work they keep taking on more responsibility, growing their income and yet, they have nothing to show for it at the end of the year, except for a few fancy vacation memories on their Facebook and Instagram accounts.
Being intentional with your finances, will, in fact, lead to happiness. If you work towards investing your money thoughtfully in a personal set of goals, you will be working towards your full potential. Think of those vacations in the context of the fun you will spend with family. Rather than the context of “escaping” work. It is a subtle mindset adjustment, but one of those is actually working towards a greater goal.
are you ready to be happy?
Are you ready to pursue your full potential? I help HENRY’s define their personal goals, create a plan to get to achieve those goals and intentionally manage their money. Contact me for a free consultation to discuss your game plan.
Why Everyone is Talking About Their Extra COVID Cash
Even though we are doordashing dinner, our grocery bills are exploding and we’re buying new bikes… our checking accounts are unusually flush with cash and credit card bills are low.
We’ve been forced to save during COVID-19
On average we’re spending 25-30% less due to the coronavirus.
Businesses are closed and we are staying home. Spring and summer plans were cancelled and refunds are rolling in from flights, hotel reservations and summer camps.
What Should You Do With Your extra COVID Cash?
Be intentional with that money, fund your future happiness.
If you are wondering what you should be doing with this new found stash of cash (cache of cash?), I have some suggestions:
1. Let it ride
Most people don’t have 3 month's worth of family expenses set aside in an emergency fund. If you do now, congratulations. Now more than ever, the argument for having a sizable chunk in cash is becoming abundantly clear. Set this money aside for the unexpected.
2. Upgrade Your live/work space
If you have been considering updating your furniture, splashing some new paint on the walls, or turning an extra bedroom into a study … now is the time to do it. You will likely be spending more time working from home in the future. And your kids are going to be schooling at home in the coming years (including your college kids). It all adds up to many more hours a day in your house. You might as well take the time to make it as comfortable as possible. Talk to a local designer or use an online tool. We’ve been using Havenly.
3. Upgrade your yard
Just as important as your inside living space, is your outside living space. Now is the time to invest in beautifying your yard. There are added benefits as well, as gardening is a wonderful outlet for any extra time you may have. And it is also helpful work for finding mental head space/peace.
4. Get Your Credit Cards in Control
If you have let your credit cards get a bit out of control, now is the time to pay them down, and assess what you really need to be spending. Part of that is getting control of those recurring needling $8-$100 expenses that get lost on your credit card bill. Now they are suddenly super visible. Start canceling subscriptions. Get your credit cards completely under control.
5. Fund your 529s
Invest in your kid’s education. You can put $15k into each of your children’s 529s. I typically suggest aiming to have two year’s worth of in-state tuition set aside when the kids graduate from high school.
6. Fund your IRAS
Setting aside money for your long term financial planning, is always important, and should be done a set cadence. Now could be a brilliant time to fund your 2020 Roth IRA (as well as your 2019 if not yet done). And if you have been hearing about backdoor Roth’s, it is time to implement one. A good read on a back door Roth can be found at the White Coat Investor.
7. Fund your brokerage account
Adding money to your mid/long-term savings can also be done through a standard brokerage account. You will end up paying capital gains taxes, sure, but the market is the best way to earn money, when your time horizon is greater than 5 years. After depositing your money in the account, I suggest dollar cost averaging in over the course of the next several months. Pick a day of the month (I like to use the first of the month), and make your purchases, regardless of the daily results of the SP500. You need some sort of forcing function to make you follow through, in the face of an ever changing market. Not sure what to invest in? Get in touch with me to talk about what to buy.
8. Financially Support Equality + Social justice
Now is the perfect time to put your money to good use, fighting for social justice, right here in the USA. Put your money where your mouth is!
Be intentional with your money, and it can help bring you joy
This time of quarantines has been an instructive time. Use it as a level set to gauge what you really need to be spending. Your extra money, needs to find an intentional place in your life. Make it work towards your ultimate happiness. Don’t let it go to waste!
6 Stimulus Bill And IRS Changes That You Need To Know
The IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
We are living in some pretty wild times. Things are moving fast in the business world, health care and government. It would appear that our current strategy of homeschooling and social distancing is going to be around for a while.
Due to the COVID-19 crisis, the IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
6 KEY Stimulus Bill and IRS Changes
as of 3/28/20
Fed Income Tax filing deadline is July 15, 2020
The IRS and Treasury department decided to extend the Federal income tax filing deadline for both individuals and businesses normally due on April 15 to July 15. This is an automatic extension, there are no required forms to file. If you cannot meet the July 15th deadline, you will still be able to file an extension, using form 4868 for individuals and 7004 for businesses.
June Quarterly Estimated Payments are STILL due
Note that payments normally due on June 15th for quarterly estimated tax payments have NOT been extended.
If you are due a refund, file it asap.
If you are due a refund from the Fed or state, it is strongly advised to go ahead and file your return. Time value of money suggests the faster you get the money, the more valuable it is. So, get it done if you are set to get a refund. Most tax refunds are still being issued within 21 days.
Individual contributions are extended to July 15, 2020
Individuals are being given an opportunity to make contributions to IRA, Roth IRA, HSA and MSA accounts until July 15th.
Payments are not automatically delayed
If you have already filed your return, owe taxes and have scheduled a payment for April 15, the payment will not be automatically delayed. You must cancel the payment and then reschedule it for July 15.
4 ways to cancel and reschedule your payment
If you scheduled a payment through IRS Direct Pay, you can use your confirmation number from the payment to access the Look Up a Payment feature. You can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
If you scheduled a payment through Electronic Federal Tax Payment System (EFTPS), click on Payments from the EFTPS home page, login, then click Cancel a Tax Payment from the left menu and follow the instructions. You must do so at least two business days before the scheduled payment date.
If you scheduled a payment as part of filing your tax return (authorizing an electronic funds withdrawal), you may revoke (cancel) your payment by contacting the U.S. Treasury Financial Agent at 888-353-4537. You must call to make a payment cancellation request no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
If you scheduled a payment by credit card or debit card, contact the card processor to cancel the card payment.
Recovery Rebates: The CARES bill provides payments to taxpayers.
“Recovery Rebates” are being treated as advance refunds of a 2020 tax credit.
Under this provision, individuals will receive a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child.
The credit is phased out for taxpayers with adjusted gross income (AGI) above $150,000 (for joint filers), $112,500 (for heads of household), and $75,000 for other individuals.
The credit is not available to non-resident aliens, individuals who can be claimed as a dependent by another taxpayer, estates or trusts.
Taxpayers will reduce the amount of the credit available on their 2020 tax return by the amount of the advance refund payment they receive.
8 Healthy Financial Moves To Make While You Self-Quarantine
COVID-19 is your “wakeup call” and perfect time to get eight key personal finance items in order.
~10 words
COVID-19 is your “wakeup call” to get eight key financial items in order.
~100 words
Use the COVID-10 self-quarantine as a prime opportunity to recognize, reflect and plan your family’s financial future. Take the time to resolve difficult conversations and issues between you and your family. Organize a cache of all-important financial documents, associated usernames and passwords. Make sure that your will is updated and distributed to the proper people. Talk to your parents about how they want things to play out when they pass. Reflect and confirm that you are comfortable with your current investment allocations.
~1000+ words -
I am writing to you from my home office, which I am currently sharing with my wife and all of her very loud online meetings, while the boys bitch and moan about having to do schoolwork on “more than one subject at home”. Needless to say, the Chamberlain family is in the process of figuring out how this entire COVID-19 environment is going to work out. We are cautiously optimistic, that we will get through this, with a lot of patience and, it could be a time that brings us closer together as a family.
As we adjust to the coming weeks of forced social distancing, WFH and home schooling, and open calendars, we are being given the rarity of time. Time to get crucial, but often overlooked planning items completed. Use COVID-19 as a wakeup call to get your documents in order, deal with difficult family conversations and make long-lasting adjustments that will benefit you and your family —guaranteed.
Create a shared file with all your accounts info.
For each of your individual and joint accounts, record the url, username, password and the latest pdf statement for the following:
Checking/savings accounts
Credit card
Mortgage
Car/student loans
Brokerage
IRA/Roth
401k
Car/home owners/umbrella insurance
529s for the kids
Life insurance policies
Ensure both you and your partner know where your latest tax files are located.
If they are soft, they are likely encrypted with a password, record it. Also record your accountant’s name and contact information.
Share your will.
Get a soft copy of your will. Forward it to family, beneficiaries and the executor.
Don’t have a will?!! Now is the time to get one.
Getting a will is not hard or time consuming. The hard part is the conversation between you and your partner about:
Choosing a guardian for your children, if both parents died
Divvying up special items
Deciding on your power of attorney to deal with property/assets
Choosing your executor
Who is going to make health care/life decisions for you should you become incapable of making your own decisions? And when does the plug finally get pulled?
Know your parents’ wishes.
Since we are on the will topic … have a conversation with your older loved ones. Do they have a will? Do they have specific wants, were they to die? Where will they be buried? Who is the executor of the will? Do all parties of the will know and understand the situation? Is their estate in good order? Do they owe money? Do you know where their important docs are kept? Who do they count on for tax/financial/business/insurance/banking advice?
Emergency cash reserve - build it!
Do you have enough cash in an emergency fund to accommodate 3 months of living expenses? Typically, it can feel burdensome to keep this much cash in an easily accessible savings account. During times of extreme uncertainty, such as the time we now face, cash solves a lot of problems (and relieves anxiety). If you don’t have enough saved, now is the time to start planning how you are going to do it.
Invest in your social network
Do you have the social/family network, in close proximity, that will help you through trying times? If you have been putting your friendships and family time at a lower priority than work, you are probably about to feel the negative affects of that decision. Now is the time to come up with solutions to enrich those relationships and make sure your family/friends know you love them.
Recognize your risk tolerance
How are you dealing with the extreme variability of your investments. Now is the time when you really start to understand how you emotionally handle the market’s ups and downs. Are you properly invested? Are the drops in your portfolio causing you extreme pain? Now is the time to talk to your financial advisor about your long-term investment strategy.
This is a wild time. Let it be a forcing function that helps you solve some outstanding ugly issues. And continue to look on the bright side of the situation.
*I discovered the ~10 Words, ~100 Words, ~1000 Words from the City Schools of Decatur COVID-19 emails and I’m a big fan of this communication style. Hopefully, you appreciate it too.
Worst Week In The Market, Now What?
It has been a crazy week in the market. By weeks end, the SP500 has lost ~12% … roughly where the market was back in September (not that long ago). And that is after the market returned 30% in 2019.
The current issue is being blamed on the outbreak of the corona virus (COVID-19) and how it will negatively impact the economy. And possibly to a lesser degree, on Bernie Sanders locking down the Democratic nomination come Super Tuesday.
I do not claim to have any idea how far this outbreak will spread, nor how many lives it will claim, before it is brought under control. I’m reasonably certain that many (or perhaps most) of the world’s leading virologists and epidemiologists are working on it, and I believe that their efforts will ultimately succeed. Clearly, this is nothing more (or less) than my personal opinion. But if the rich history of similar outbreaks in this century is any guide, this would seem to be a reasonable hypothesis.
Source: Stockcharts.com
I draw your attention to:
SARS in 2003-04, also originating in China
The bird flu epidemic in 2005-2006
In 2009, a new strain of swine flu
The Ebola outbreak in the autumn of 2014
The mosquito-borne Zika virus outbreak in 2016-17
Without belaboring the point: the super-spreader of SARS – a fish seller – checked into a hospital in Guangzhou on January 31, 2003, basically infecting the whole staff. The epidemic exploded from there.
On that first day of the litany of epidemics cited above, the S&P 500 closed at 855.70. Seventeen years and six epidemics later (including the current one), this past Friday the Index closed fairly close to four times higher. I’m confident that you see where I’m going with this.
You are investing for the long term, to reach long term goals. Several investment principles to be considered:
1. Stocks are completely irrational in the short term, making mad swings throughout days and weeks. However, stocks are completely rational in the long term, they grow at 9.5% per year.
2. Looking at past data, drops like this weeks, happen every 12-18 months and last 4-6 months.
3. Think like a business owner. We are not buying tickers, we are buying the best businesses in the world, with strong moats, great innovation, access to capital and willing purchasers. While there will be short term disruptions to these companies, its best to view them as wonderful assets ON SALE.
4. Always have some cash on the sidelines. It will help see you through turbulent times, as well as providing liquidity for buying opportunities. (For those of you whose money I manage, we just allocated some of your cash stock pile. to buying).
I don’t have a crystal ball, so I can’t tell you that stocks won’t drop another 10% next week. They could very well … or they could rally. What is important is that you understand market volatility, while committing to investing through it.
If you have any questions or concerns about your investments, please don’t hesitate to reach out to me. I am here to help.
Are You Underpaid? Find Out In 5 Easy Steps
I was recently asked by a client how I thought her salary compared in the market place. It was an interesting question, because I do have visibility into exactly how much money a large number of people make. And it is a bit of a taboo topic among friends to debate salaries. Not very often are you out at dinner with friends, sipping a craft cocktail, and everyone takes turns sharing their salary and compensation.
My initial thought was that this particular person was leaning towards the lower end of the range. It’s an unfortunate fact that the gender pay gap still exists today where the median salary of women is .79-.94 cents for every one dollar a man makes. So I told her my best educated guess, noting that I don’t have another client with her exact title and years of experience.
My second thought was: everyone in the work force should know exactly what they are worth in the open market. Unemployment is at historically low levels (~3.5%). And there are a record number of job openings (6 million). So the best way to find out exactly what you are worth is to hit the job market.
How to find out if you are underpaid
Update Your Resume
It may need a new format, if you have not updated it in a while. And make sure and specifically lay out major wins you have had on the job and how you participated in the win. If you don’t have a color picture, you need to add one.
Leverage Linkedin
Based on your resume, you need to update your Linkedin profile and connect with as many peers and friends as possible. You likely don’t need to pay for any add on’s at this point. But you do need to start creating a compelling presence. The vast majority of recruiters are using Linkedin.
Use your Network
Start getting the word out that you are looking for some interviews. Use your network to gain entre into potential job postings. When you find interesting jobs, that you don’t have connections to, apply for them. Put your name in the hat!
Interview
Even if you don’t really want a new job, use this is a fact finding mission. What are the important skills for your type of job? What are the technologies being valued? What are salary ranges?
Know your worth
If you get an offer, wonderful … you know exactly what you are worth. And now you get to decide if you want to stay with your current gig (and ask for a raise), or make a jump.
In all cases, hitting the job market right now, will provide a gold mine of information that will help you evaluate your current job/role, what you are worth, and areas that you may need to improve.
**Note that there are additional ways to learn more about salaries, like glassdoor, local recruiters or professional groups. These are good tools, but don’t provide the additional benefit about your own personal skills and potential. Nor does it keep you personally marketable, like going out and actually hitting the job market.
If you have any questions, don’t hesitate to reach out. I am glad to help.