Momentum - Business to Business Online Magazine MOMENTUM December 2019 | Page 14

FINANCIAL FOCUS
KRISTI TREVINO
Financial Advisor
Edward Jones
www.edwardjones.com/kristi-trevino
INVEST IN YOUR FAMILY
AND COMMUNITY
W
hy do you invest? For many people,
here’s the answer: “I invest because I
want to enjoy a comfortable retirement.”
And that’s certainly a great reason,
because all of us should regularly put
money away for when we’re retired. But you can also
benefit by investing in your family and your community.
Let’s start with your family members, particularly the
younger ones. How can you invest in their future? One of
the best ways is to help send them to college. A college
degree is still a pretty good investment: The average
lifetime earnings of a college graduate are nearly $1
million higher than those of someone with a high school
degree, according to a study by the U.S. Census Bureau.
To help your children or grandchildren pay for
any college, university, vocational school or other
postsecondary education, you may want to open a 529
savings plan. With this account, withdrawals are federally
tax free, as long as the money is used for qualified higher
education expenses, including those from trade and
vocational schools. (However, if you withdraw some of
the earnings on your account, and you don’t use the
money for qualified expenses, it will be taxable and can
also incur a 10% federal tax penalty.) Plus, you retain
control of the funds until it’s time for them to be used
for school, so if your original beneficiary chooses not
to pursue some type of higher education, you can
name a different eligible beneficiary.
Another way to invest in your family is to help
your adult children avoid feeling obligated to
provide financial assistance to you. For example,
if you ever required some type of long-term care,
such as an extended stay in a nursing home, could
you afford it? The average cost for a private room
in a nursing home is more than $100,000 per year,
according to a study by Genworth, an insurance
company. And Medicare typically pays very few of
these expenses. So, to avoid burdening your adult
children – while also preserving your own financial
independence – you may want to consider some
type of long-term care insurance. A financial advisor
can help you determine what coverage may be
appropriate.
Moving beyond your family, you may want
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MOMENTUM
to invest in the social fabric of your community by
contributing to local charitable, civic, educational or
cultural groups. Of course, now that we’re in the holiday
season, it’s the perfect time for such gifts. Furthermore,
your gift will be more appreciated than in years past
because one of the chief incentives for charitable giving
– a tax deduction – was lost for many people due to
tax law changes, which raised the standard deduction
so significantly that far fewer people chose to itemize
deductions. However, you might still be able to gain
some tax benefits from your charitable gifts. To name
one possibility, you could donate financial assets,
such as stocks that have risen in value, freeing you of
potential capital gains taxes. In any case, contact your
tax advisor if you’re considering sizable charitable gifts.
Saving for your retirement will always be important.
But don’t forget about investing in your family and your
community – because these investments can provide
satisfying returns.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor.
Edward Jones, its employees and financial advisors
cannot provide tax or legal advice. You should consult
your attorney or qualified tax advisor regarding your
situation.