How and Why

Brian Halverson

Heartland Trust Company has served our clients for over 32 years. WOW! And we are just getting
started! It has been an exciting few months at Heartland. Our staff is growing and we are thrilled about
upcoming advancements to our business. We will have more to share in our next newsletter.

Brian Halverson - PresidentHow and Why
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Sticker Shock: Creative Ways to Lower the Cost of College

Even with all of your savvy college shopping and research about financial aid, college costs may
still be prohibitive. At these prices, you expect you’ll need to make substantial financial
sacrifices to send your child to college. Or maybe your child won’t be able to attend the college
of his or her choice at all. Before you throw in the towel, you and your child should consider
steps that can actually lower college costs. Although some of these ideas deviate from the
typical four-year college experience, they just might be your child’s ticket to college — and your
ticket to financial sanity.

Ask about tuition discounts and flexible repayment programs.
Ask whether the college you apply to offers any tuition discounts or flexible repayment
programs. For example, the school may offer a discount if you pay the entire semester’s bill up
front, or if you allow the money to be directly debited from your bank account. The college may
also allow you to spread your payments over 12 months or extend them for a period after your
child graduates. And if it’s your alma mater, don’t forget to inquire about any discounts for the
children of alumni. Finally, ask if some charges are optional (e.g., full meal plan versus limited
meal plan).

Graduate in three years instead of four.
Some colleges offer accelerated programs that allow your child to graduate in three years
instead of four. This can save you a whole year’s worth of tuition and related expenses. Some
colleges offer a similar program that combines an undergraduate/graduate degree in five years.
The main drawback is that your child will have to take a heavier course load each semester and
may have to forgo summer breaks to meet his or her academic obligations. Also, some
educators believe that students need four years of college to develop to their fullest potential
— intellectually, emotionally, and occupationally.

Earn college credit in high school.
By taking advanced placement courses or special academic exams, your child may be able to
earn college credits while still in high school. This means that your child may be able to take
fewer classes in college, saving you money.

Think about cooperative education.
Cooperative (co-op) education is a type of education where semesters of course work alternate
with semesters of paid work at internships that your child helps select. Although a co-op degree
usually takes five years to obtain, your child will be earning money during these years that can
be used for tuition costs. In addition, your child gains valuable job experience.
Enroll in a community college, then transfer to a four-year college.
One way to cut college costs is to have your child enroll in a local community college for a
couple of years, where costs are often substantially less than four-year institutions. Then, after
two years, your child can transfer to a four-year institution. Your child’s diploma will be from
the four-year institution, but your expenses won’t. Before choosing this route, make sure that
any credits your child earns at the community college will be transferable to another institution.

Defer enrollment for a year.
Your child might be aching to get to college, but taking a year off, commonly referred to as a
“gap year,” can give you both some financial breathing room and allow your child to work and
save money for a full year before starting college. Your child will apply under the college’s
normal application deadline with the rest of his or her classmates and, once accepted, can ask
for a one-year deferment. But make sure the college offers deferred enrollment before your
child goes through the time and expense of applying.

Live at home.
It’s not every child’s dream, but attending a nearby college and living at home, even for a year
or two, can substantially reduce costs by eliminating room-and-board expenses (though your
child will incur commuting costs). This arrangement may work out best at a college that has a
student commuter population, because the college is likely to try to meet these students’
needs. If your child does live at home, you’ll both need to sit down beforehand and discuss
mutual expectations. For example, now that your child’s in college, it’s not realistic to expect
him or her to adhere to a rigid weekend curfew.

Research online learning options.
Taking courses online is a trend that’s here to stay, and many colleges are in the process of
creating or expanding their opportunities for online learning. Your child might be able to take a
year’s worth of classes from home and then attend the same school in person for the remaining

Work part-time throughout the college years.
Part-time work during college can help your child defray some costs, though working during
school can be both a physical and emotional strain. To make sure that your child’s academic
work doesn’t suffer, one option might be for your child to focus on school the first year and
then obtain a part-time job in the remaining years. In addition, encouraging your child to
become an RA (resident assistant) at college could earn them free room and board.

Join the military.
There are several options here. Under the Reserve Officers’ Training Corps (ROTC) scholarship
program, your child can receive a free college education in exchange for a required period of
active duty following graduation. Your child can apply for an ROTC scholarship at a military
recruiting office during his or her junior or senior year of high school. Or, your child can serve in
the military and then attend college under the GI Bill. Your child can also attend a service
academy, like the U.S. Military Academy at West Point, for free. Be aware, though, that these
schools are among the most competitive in the country, and your child must serve a minimum
number of years of active duty upon graduation. For more information, visit your local military
recruiting office, or speak to your child’s high school guidance counselor.

Go to school abroad.
Foreign schools generally offer an excellent education at a price comparable to that of an
average four-year public college in the United States. And in the global economy, many
employers tend to look favorably on studying abroad. Your child will even be eligible for need-
based federal student loans (but not grants), as well as the two federal education tax credits —
the American Opportunity credit and the Lifetime Learning credit.

Look for employer educational assistance.
Does your employer offer any educational benefits for the children of its employees, like partial
tuition reimbursement or company scholarships? Check with your human resources manager.

Have grandparents pay tuition directly to the college.
Payments that grandparents (or others) make directly to a college aren’t considered gifts for
purposes of the federal gift tax rules. So, grandparents can be as generous as they want without
having to worry about the tax implications for themselves. Keep in mind, though, that any
payments must go directly to the college. They can’t be delivered to your child with instructions
to apply them to the college bills.

Broadridge Investor Communication SolutionsSticker Shock: Creative Ways to Lower the Cost of College
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Practical Investment Considerations for Nonprofit Foundations and Endowment

Full disclaimer: this article is not all encompassing. You could write a long book on foundation and endowment investment management. This is a collection of thoughts and opinions about what I think foundation and endowment boards should consider. If you’ve ever met me, you know I’m both opinionated and long-winded. So, if you serve on a board or work for a nonprofit foundation/endowment, don’t hesitate to send me an email and take me to task for why I’m wrong. 

Dustin Sobolik - Investment OfficerPractical Investment Considerations for Nonprofit Foundations and Endowment
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Living For Today, Planning For The Future 

Brian Halverson

Too often, the words “planning for your future” lead only to a conversation about retirement. In reality, the challenge we all face is balancing how to meet long-term financial goals with today’s expenses. Yes, you should participate in your employer’s retirement plan, and you should have an emergency fund, but how do you do that while living fully today? 

My spouse and I are blessed with three young, active kids. We are immersed not only in our own lives and events but keep up with an avalanche of activities for our children. It seems like every weekend we are traveling out of town to another tournament. This means paying for gas, food, and a hotel at every turn. It drains the checkbook, but we’ve found creative ways to stick to a budget. We bring snacks and meals, and use credit card and loyalty rewards points for hotels and gas when we can. Sometimes we only take part of the family, which gives my spouse or I valuable one on one time with each of the kids.

Brian Halverson - PresidentLiving For Today, Planning For The Future 
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Planning for Earned Income in Retirement Adapted from Broadridge Investor Communication Services

Adapted from Broadridge Investor Communication Services

If you’re like a lot of people, retirement won’t be the world of gardening, golfing, traveling, and tennis you once envisioned. Rather, retirement will mean relaxing and working. Maybe you’ve retired from your “regular” job and started a business, or perhaps you want to work part-time to stay busy. However, if you work after you start receiving Social Security retirement benefits, your earnings may affect the amount of your benefit check.

How your earnings affect your benefit

Your earnings in retirement may increase your retirement benefit

Your monthly Social Security retirement benefit is based on your lifetime earnings. When you become entitled to retirement benefits at age 62, the Social Security Administration (SSA) calculates your primary insurance amount (PIA) upon which your retirement benefit will be based. Later, your PIA will be recalculated annually if you have had any new earnings that might substantially increase your benefit. So if you continue to work after you start receiving retirement benefits, these earnings may eventually increase your PIA and thus your retirement benefit.

Broadridge Investor Communication SolutionsPlanning for Earned Income in Retirement Adapted from Broadridge Investor Communication Services
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Is a Trust Right For You?

We have all heard the horror stories about families being torn apart after their parents pass away. Brothers, sisters, and long-lost family members who have spent years in court fighting over land, money, family heirlooms – big and small – and more. There will never be a family Christmas or birthday celebration together again.

This is not the vision or dreams that Mom and Dad held so close. This is not why they worked so hard and saved so much to give a better life to their kids and grandkids.

A trust can help.

Many of my clients did not see themselves as trust people until they knew the facts and benefits. Many believed trusts are only for the ultra-wealthy and famous, but that could not be further from the truth.

Jon BensonIs a Trust Right For You?
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What is My Net Worth?

You probably know what net worth means, but do you know what your net worth is? Knowing this number can help you get a better picture of your financial situation. Remember: this number represents one moment in time, as your financial health is always changing.

Simply stated, your net worth is the total of assets minus debts or liabilities. To find this number, use one of the countless online calculators or spreadsheets available. The downside of this method is you need to manually update the values. There are also apps for your phone or tablet, or software for your computer, that can track your net worth. You may even be able to link your accounts so the values are updated automatically.

Jan Nelson, Trust OfficerWhat is My Net Worth?
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All About Credit Scores

Adapted from Broadridge Investor Communication Services

It’s difficult to imagine functioning in today’s world without credit. Whether buying a car or purchasing a home, credit has become an integral part of our everyday lives. Having easy access to credit goes hand in hand with having a good credit score, so it’s important to know how to maintain a positive credit score and credit history.

Heartland TrustAll About Credit Scores
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Retirement Plan Limits for 2022

Jana Samek, Retirement Services – Relationship Manager

The Internal Revenue Service (IRS) has set inflation-adjusted limits for IRAs and company-sponsored retirement plans for 2022. While some of the contribution limits have remained the same, other limits have changed.

The basic salary contribution limit for a 401(k) and similar company sponsored retirement plans went up to $20,500 for 2022. This is a $1,000 increase from last year. The catch-up contribution limit for those who are 50 years of age or better remained the same at $6,500.

Jana Samek, Relationship Manager – Retirement ServicesRetirement Plan Limits for 2022
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