7 lessons to help parents and young adults navigate post-college

November 7, 2022 2:24 PM

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Leaving the nest and starting out on one's own as a young adult has always been difficult. So it's not surprising that at the height of the pandemic, 52% of those 18-24 years old moved back in with their parents, according to Pew Research Center data.

Financial advisors, then, may have a number of clients who are one of the 40% of parents who are still hosting adult children two years into the pandemic. For those, as well as recent graduates carrying student debt or young people considering a career in finance, here are seven lessons in financial planning that can help you move forward.

How advisors can help parents cash in on student loan relief

The White House executive order canceling a maximum of $20,000 of student debt has been welcomed by millions of American parents who have borrowed money to help finance a child's college education. But they will have to wait to see if the program stays in place following legal challenges to its constitutionality.

The debt itself is universally called student debt, but it's no coincidence that one of the main types of loan used is commonly known as a Parent PLUS loan. "There are a significant number of parent borrowers, and they'll benefit from this," said Mark Kantrowitz, student loans expert and author of "How to Appeal for More College Financial Aid."

As a parent, the primary question is whether you qualify for relief. Here's where a financial advisor can help.

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How advisors can help parents cash in on student loan relief

How student loan relief can turbocharge retirement savings

The opportunity to go from paying down student loan debt to putting money away for retirement has opened up for millions of middle-income Americans. But after a federal judge in Texas struck down Biden's student loan forgiveness program and an appeals court temporarily blocked it, these borrowers may face uncertainty.

If the legal challenges are unsuccessful, the program will provide relief of up to $20,000 for individuals earning less than $125,000 (or $250,000 for married couples), so more affluent professionals are unlikely to be eligible.

But advisors may be able to help middle-income borrowers with low- to zero-loan balances, who will have a unique opportunity to redirect funds earmarked for student debt into their retirement accounts.

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How student loan relief can turbocharge retirement savings

Wall Street Bound launches stock-picking contest with celebrity judges

College students and recent graduates who are considering a career in finance can test their investment acumen in Wall Street Bound's "Stock Picking Challenge," with the top three receiving grants to be used for certification training, examinations or tuition.

Troy Prince, founder of Wall Street Bound, Kim Lew, CEO of Columbia University's endowment fund, and Josh Brown, CEO of Ritholtz Wealth Management, will select the finalists and winners based on their performance in managing a simulated $100,000 stock and ETF portfolio.

With its focus on stock selection, portfolio composition, risk-adjusted returns and oral presentations, the contest is "a natural extension of the Wall Street Bound ethos and our desire for students to begin experiencing institutional rigor in everything that they do," Prince said.

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Wall Street Bound launches stock-picking contest with celebrity judges

Long story short: Make continuing education a staple in the workplace

Maria Montessori talked about the value of lifelong learning. The majority of business leaders would appear to agree, with 74% of CEOs concerned about the skill level of their employees, according to a PwC report.

Unfortunately, only 18% of CEOs say they are making progress in developing training and upskilling programs in their organizations. "Here's the problem," says Suneet Dua, chief growth officer for U.S. products and technology at PwC. "They don't know where to start."

However, leaders can begin the process of making continuing education more central to their firms by exploring a range of solutions, including digital tools, mentorship programs and partnering with organizations that focus on upskilling employees.

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Long story short: Make continuing education a staple in the workplace

Adult children may be sapping their parents' retirement funds

Young adults or adult children? Either way, whether just starting post-college employment on a low salary or finding it hard to cope with the rising cost of rent where they live — or both — a significant number of young people are struggling on their own and rely on financial support from their parents.

During the pandemic, many 18- to 24-year-olds moved back in with their parents, who are often not as comfortably as they think and may need to dip into retirement savings to help them. To wit, 72% of adult children think their parents have the means to support them, but only 21% of parents agree.

However, parents can protect their financial security by involving adult children at home in helping offset the cost of supporting them, such as by contributing in non-financial ways like cleaning the house. They can also use the opportunity to help their children develop their own financial literacy for the future.

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Adult children may be sapping their parents' retirement funds

Refinanced student loans offer big returns — and risks

Student loan debt is typically thought of as an investment in one's education, but Phoenix-based Yrefy has turned it — for accredited investors — into an alternative investment in their financial future.

Founded by student loan industry professionals, the firm enables distressed private student loan borrowers to refinance at prime rates and offers the refinanced loans as a secured, collateralized investment opportunity with returns of up to 10.25% annually for a minimum of $50,000.

While the high returns are tempting, some advisors are wary. "You're literally investing in the probability that a young, college-educated person isn't going to default on their loans and ruin their credit," said Megan Kopka, owner of Kopka Financial.

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Refinanced student loans offer big returns — and risks

How the mindset of a D-1 football athlete translates into the business world

The competitive world of D-1 sports is proving to be the ideal training ground for SaVion Harris as he launches his career in financial planning.

Since graduating from the University of Texas at San Antonio in 2021 and joining Intercontinental Wealth Advisors, Harris has found a lot of common ground between his routine in training as a student-athlete and the requirements of being a financial planner.

"Truly loving what you do and always striving to be the best version of yourself are the keys to continually growing as a person and to growing a business," Harris said.

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How the mindset of a D-1 football athlete translates into the business world