8 Risky Jobs That Pay Big Bucks

Often with dangerous jobs, the pay doesn’t come close to compensating for the risk. In fact, plenty of perilous jobs pay paltry sums compared to other options. Take fishermen and loggers. They can expect median salaries of under $35,000 a year, $23,000 less than the mean for all workers. Yet the fatality rate for fishermen is nearly 39 times the rate for all occupations, the highest of any profession, in fact. Loggers, at nearly 28 times the overall fatality rate, rank second.

The COVID-19 pandemic shook up the risk scenario in the workplace. Overall, workplace injuries and illnesses were down 5.7% in 2020, compared to the previous year. But a closer look at the numbers reveals that while injuries dropped significantly, illnesses went way up. 

The pandemic also made a new group of low-paying jobs among the riskiest in the nation. Nursing assistants had the highest number of days of any profession away from work in 2020, the most recent year available, according to the Bureau of Labor Statistics. They had 1,024 days away from work per 10,000 workers in 2020, an increase of 14 times the rate in 2019. Yet nursing assistants make a mean wage of just over $30,000.

Going back the last few years before the pandemic, there were generally between 10,000 and 11,000 respiratory illnesses among U.S. workers each year. In 2020, however, there were nearly 429,000. Conversely, the days away from work decreased slightly for heavy and tractor-trailer truck drivers, whose mean wage was just over $50,000, between 2019 and 2020.

As perilous as work has become for many during the pandemic, fewer people were injured on the job in 2020 than in any year since 2013, according to the most recent data from the Bureau of Labor Statistics. Still, those data showed an American worker died every 111 minutes from a job-related injury. The most common cause of death on the job was transportation-related incidents, which resulted in 1,778 deaths that year, more than 37% of all work-related deaths.

Not surprisingly, workers in jobs that involved transportation and moving material accounted for the biggest proportion of occupational deaths at a total of 2,258, accounting for more than 47% of the total work-related deaths in the U.S.

We believe that if you’re going to take a risky job, you should at least get compensated handsomely for it. So we crunched the numbers on injuries, fatalities and salaries to identify eight occupations offering paychecks that make up for the elevated risks by paying more than the national median of about $58,000. Top earners in many of these fields can enjoy six-figure salaries, in some cases even without college degrees. Plus, many of them won’t be replaced by technology, which spells job security. 

Take a look at these risky jobs that pay well.

Data sources: All data provided by the U.S. Bureau of Labor Statistics, unless otherwise noted. Most statistics from 2020, unless otherwise indicated. That year, the fatality rate for all occupations was 3.4 deaths per 100,000 workers.. “Top pay” represents the annual salary of a worker in the 90th percentile of an occupation, unless otherwise noted. We used the most updated data provided by BLS. In some instances, that was as far back as 2019 or older. Also, in some instances, the bureau provided median salary information, while for other occupations, it provided average salary information.

1 of 8

Airline Pilot

Photo of a man in an airplane cockpitPhoto of a man in an airplane cockpit
  • Number of workers: 42,770
  • Rate of injuries/illnesses: 34.3 (3.4 for all workers). 
  • This represents a decrease of the 2019 rate of 61.8 per 100,000 FTEs
  • Median annual salary: $115,080
  • Top pay: $197,400*
  • Annual fatalities: 4

Flying may be safer than driving, with crashes exceedingly rare, but pilots still manage to get hurt. The most common injury to pilots is back strain, no doubt exacerbated by countless hours spent in flight decks. Still, the pay might well make the risks worthwhile. Annual median wages for airline pilots, copilots and flight engineers are the highest of all our risky jobs.

You can save yourself the cost of college by heading straight to flight school, though most airlines prefer to hire degree-holders. You’ll need the edge. Competition for openings can be fierce, given industry consolidation and the job market’s overall weakness. You’ll also have to clock the flight hours necessary to even apply for an airline job. The Federal Aviation Administration requires applicants for pilot and first officer positions to have a minimum of 1,500 hours of total flight time.

But if you rack up enough experience and airborne hours, annual pay with the major airlines can soar to $200,000 or more, according to AirlinePilotCentral.com. Similarly plump salaries can be had if you land an offer from one of the flying freight giants. FedEx and UPS pay their captains at least $212,000 and $233,000 a year, respectively, starting in just their second years. Bonus: no whiny passengers.

*According to Airline Pilot Central, United offers its 12th year captains of Boeing 777 planes the highest minimum annual salary of all the legacy airlines.

2 of 8

Private Detective

Photo of a man in sunglasses behind the wheel of a car holding a cameraPhoto of a man in sunglasses behind the wheel of a car holding a camera
  • Number of workers:  33,700
  • Rate of injuries/illnesses: 122.6 per 10,000 workers
  • Median workdays missed due to injury/illness: 43
  • Mean annual salary: $60,970
  • Top pay: $98,070
  • Annual fatalities: 1

Digging up information can be pretty strenuous work. Gumshoes sustain most of their injuries in car accidents and physical altercations. But even those tallies are relatively low, so the above-average pay for private eyes may be worth the slightly elevated risk.

Most detective work does not have an education requirement, but the ability to learn on the job is a must, and previous related work experience is a plus. You’ll also need a license in most states; requirements vary. And if you specialize in certain fields, say insurance fraud or computer forensics, a related bachelor’s degree might be necessary for some corporate investigators.

That expertise can not only help you solve whodunits but also push up your pay. Investigative agencies, both large and small, are by far the biggest employers of detectives. Distant runner-ups are law firms and state and local governments.

3 of 8

Registered Nurse

photo of a nurse and a patientphoto of a nurse and a patient
  • Number of workers: 3 million
  • Rate of injuries/illnesses: 1023.8 per 10,000 workers
  • Median workdays missed due to injury/illness: 8
  • Median annual salary: $75,330
  • Top pay: $103,000
  • Annual fatalities: 12

Registered nurses were among those most affected by COVID; they endured a whopping 78,740 injuries and illnesses in 2020, an increase of more than 290% over 2019 when there were 20,150 injuries and illnesses among registered nurses, according to the Bureau of Labor Statistics. In 2020, the number of cases in which registered nurses had days away from work increased by 58,590 cases (290.8 percent) to 78,740 cases, according to the Bureau of Labor Statistics.

The states with the largest increase in cases among nurses who had days away from work were Michigan, where cases rose more than 1,000% and Iowa, which had an increase of more than 900%. .

Typical wages about 88% above the national median might help compensate for  the pain. California registered nurses earn a particularly comfortable wage, into six figures in nine West Coast metro areas.

You need a bachelor’s or associate’s degree in nursing or a diploma from an accredited nursing program in order to become an RN. If you extend your education to a master’s degree, you can earn even more; median annual pay for nurse practitioners is nearly $90,000, and top earners make $120,500 a year.

According to Indeed.com, the average base salary for a registered nurse is nearly $89,000 as of May 2022. That ranges from $80,266 for nurses with less than a year of experience to $104,907 for those with more than 10 years of experience. New York is the highest paying city where registered nurses earn an average of nearly $103,000 a year. But Iindeed says just 62% of registered nurses in the U.S. think their salaries are enough for the cost of living in their area.

4 of 8

Professional Athlete

Photo of a baseball, football and basketball playerPhoto of a baseball, football and basketball player
  • Number of workers: 16,700
  • Rate of injuries/illnesses: 1,542.1 per 10,000 workers
  • Median workdays missed due to injury/illness: 10
  • Median annual salary: $77,300
  • Top pay: $107.5 million
  • Annual fatalities: 10

When your job is to exercise and physically compete on a regular basis, your body is bound to get a little run down. More than half of the injuries reported by athletes are sprains, strains and tears. But what’s becoming a little worse for wear when you get to play the game you love for a living?

The above-average pay doesn’t hurt, either. It would behoove players to save that extra income. Athletic careers offer little stability and are often short-lived. According to Indeed.com, the average professional athlete base salary as of April 20222 was $115,429, including $222,275 for the NFL. The highest paying city for professional athletes was New York, where the average salary is $133,762.

According to the job website Ladders, the top-paid American athlete is Dallas Cowboys quarterback Dak Prescott who earns a jaw-dropping $107.5 million a year.

But just 45% of professional athletes in the U.S. report being satisfied that their salaries are enough for the cost of living in their area.

5 of 8

Police Officer

Photo of a torso of a police officer holding a firearmPhoto of a torso of a police officer holding a firearm
  • Number of workers: 665,000
  • Rate of injuries/illnesses: 121.7 per 10,000 workers
  • Median workdays missed due to injury/illness: 15
  • Median annual salary: $64,610
  • Top pay: $102,530
  • Annual fatalities: 105 

Police work is truly risky business. Exhibit A: The number of work-related deaths for cops is the greatest of all the occupations on this list. Still, the fatality rate is just 18.6 per 100,000 workers, about on par with taxi drivers.

If you don’t mind mixing it up with the occasional physical altercation or high-speed chase, paychecks 59% higher than the national median may be worth sustaining some sprains, strains and tears (the most common injuries for police officers). You can enter the police academy after graduating from high school or getting your GED, though many agencies require some college coursework or a college degree. But you have to be at least 21 years old to become an officer (younger recruits can be cadets and do clerical work until they’re of age). A college degree can help fatten your paycheck, however. A B.A. in criminal justice can push salaries into six figures, according to Payscale.

Indeed.com reports the average base salary for a U.S. police officer is $55,390. This ranges from $46,900 for officers with less than a year of experience to $76,650 for those with more than ten years of experience. The highest paying city is San Jose, California, where officers make an average of $131,000. According to Indeed, 53% of police officers report being satisfied that their salaries are enough for the cost of living in their area. 

Note that while the Bureau of Labor Statistics data for wages for police officers refer to 2021, the most currently available injury and illness information dates to 2018.

6 of 8

Railroad Conductor/Yardmaster

Photo of a trainPhoto of a train
  • Number of workers: 48,030 
  • Rate of injuries/illnesses: 180 per 10,000 workers
  • Median workdays missed due to injury/illness: 22
  • Median annual salary: $63,960
  • Top pay: $82,460
  • Annual fatalities: 11 in 2019

Train-track tragedies are as uncommon as they are heartbreaking. Overall, railroad safety has improved dramatically over the past decade. Heading the crews of freight and passenger trains and rail yards, railroad conductors and yardmasters have the highest rates of injury of all rail transportation workers, but they have the potential to score the biggest paychecks, too. You need just a high school diploma or the equivalent to get started, and you have to be certified by the Federal Railroad Administration to become a conductor. Most employers require one to three months of on-the-job training. Amtrak and some freight companies offer their own training programs, while smaller railroads may send you to a central facility or community college to prep you for the job.

7 of 8

Mining Machine Operator

Photo of a construction vehicle in a minePhoto of a construction vehicle in a mine
  • Number of workers: 14,740
  • Rate of injuries/illnesses: 248.0 per 10,000 workers
  • Median workdays missed due to injury/illness: 23 for surface mining, 46 for underground and 60 for continuous Median annual salary: $60,300
  • Top pay: $78,060
  • Annual fatalities: 5 for surface mining, 7 for underground

Not surprisingly, pumping the Earth for its resources can really suck the life out of you. Extraction workers, a broad category of workers who mine and drill for oil, gas, coal and the like, recorded a total of 92 deaths and 3,990 injuries in 2011. And while some extraction jobs offer scant compensation for such risks, pay for certain mining machine operators is more tempting.

Education requirements are minimal to get started (some jobs don’t even require a high school diploma). But if you go into mining with a college degree, you stand to earn a fatter paycheck and added safety as a mining engineer. Indeed says mining engineers, who inspect mining areas and design underground systems of entries, exits and tunnels, make an average national salary of more than $97,000 as of April 2022. Their job is also dangerous as they are often close to heavy machinery and are exposed to air pollution and in danger of being hurt in a cave-in.

8 of 8

Electrician

Photo of a hand and a screwdriver working on wiresPhoto of a hand and a screwdriver working on wires
  • Number of workers: 729,600 in 2020
  • Rate of injuries/illnesses: 122.2 per 10,000 workers
  • Median workdays missed due to injury/illness: 15
  • Median annual salary: $60,040
  • Top pay: $82,930
  • Annual fatalities: 68 in 2019

With high demand to plug in our various devices at home and work, electricians are practically guaranteed prosperous careers. 

But this profession comes with its stumbling blocks — literally. Electricians’ injuries are most often caused by falls. That’s not surprising, considering they often spend lots of time at construction sites and on ladders. If you watch your step, you typically stand to enjoy paychecks 43% higher than the national median.

You can start your career as an electrician with a high school diploma (or the equivalent) and a paid four-year apprenticeship, which you can find through the U.S. Department of Labor. But having a Bachelor’s degree can help boost your income; according to Payscale, a college-educated electrician can earn up to about $93,000 a year. Most states also require you to be licensed.

According to Indeed.com, the average base salary for an electrician is about $56,800 as of May 2022.

Source: kiplinger.com

How to Become a Plumber in 2022

Licensed master plumbers have the highest earning potential. The top 10% of plumbers can earn ,920 a year, according to the Bureau of Labor Statistics.
And on the high end, earning potential for master plumbers nearly reached 0,000 for the top 10%.
How Much School Do Plumbers Need?

How to Become a Plumber in 4 Steps

Potential education topics at a vocational school might include plumbing theory, water distribution, blueprint reading, draining and venting, pipe cutting and soldering and even electrical basics.
If you are currently a high school student interested in becoming a plumber, take all the math courses you can. In addition, choose classes like physics and shop to help you build an effective knowledge and skills base.
Becoming a plumber is all about licensure, so college is not a requirement. However, plumbers typically need to have their high school diploma or general equivalency diploma (GED) to start an apprenticeship. A diploma or GED is also important if you plan to take any plumbing courses at a community college (more on that below).

1. Get Your High School Diploma or GED

To be considered a journeyman plumber, you will need to pass your state’s licensing exam. In general, you will need to renew this license every three to five years and take continuing education courses to maintain your licensed status.
A plumber’s skill set is varied. As a plumber, you will need the technical knowledge to diagnose plumbing problems and make repairs. You will also need to be proficient in using a wide variety of tools, including saws, hammers, screwdrivers, wrenches and torches. Remaining in top physical condition is crucial, as you will frequently do heavy lifting and perform tasks that require stamina, often in very hot or cold environments.
Most states require you to operate as a journeyman plumber for a set number of years (between two and five) before you can seek licensure as a master plumber. To earn your license, you’ll need to pass a written and practical exam.

2. Become an Apprentice

Upon completing your apprenticeship, you can apply to become a licensed journeyman plumber. Once you reach this status, you will be able to work unsupervised on commercial and residential projects.
Becoming a plumber does not require the college career path. Instead, you will complete high school and find work as an apprentice. After a few years, you can get licensed as a journeyman plumber and then a master plumber.
We’ve found the answers to the most commonly asked questions about becoming a plumber, including how long it takes until you’re repairing leaky sinks on your own.
To earn a plumbing license, you must first complete a four- to five-year apprenticeship and then pass the journeyman exam; an apprenticeship includes classroom instruction but no formal school program. Some plumbers choose to attend a year or two of plumbing trade school before their apprenticeship.
A plumbing apprenticeship program includes on-the-job training and some classroom instruction, but many plumbers choose to attend a vocational school as a first step. Plumbing trade schools may offer special certification or even a two-year associate degree.

3. Become a Journeyman Plumber

In general, you can find a plumbing apprenticeship program through trade unions, community colleges, trade schools and even private businesses. You might need to pass an exam or interview with a licensed plumber.
How Long Does It Take to Become a Plumber?
How Much Money Do Plumbers Make?

4. Become a Master Plumber

Ready to stop worrying about money?
Depending on your state, you may be able to earn special endorsements and certifications. For example, in the Lone Star State, in addition to your Texas plumbing license, you can obtain endorsements for medical gas piping installation, multipurpose residential fire protection sprinkler installation and water supply protection installation and repair.
Scroll on to learn how to become a plumber — and what you can expect out of the career.

Wondering how to become a plumber? Our guide covers the education, apprenticeship and licensing requirements on your journey to getting certified as a licensed plumber — and offers a peek into the day-to-day, job outlook and typical salary.

Optional: Go to a Trade School

Earning a special degree or certification can give you a leg-up when applying for competitive apprenticeships.
In high school, math will be crucial to your role as a plumber. Each day, plumbers use concepts from algebra and geometry, and they’re regularly calculating using various units of measure.
At the journey level, you can work for a plumbing company or start your own business.

How Much Do Plumbers Make?

Plumbers can work on both residential and commercial projects. The day-to-day duties might include remodeling bathrooms and kitchens, replacing and repairing water and drain lines, installing new water heaters, installing new faucets, installing new toilets and installing water filtration systems.
In 2021, the median pay for plumbers was ,880, but the top 10% earned ,920.
As a master plumber, you’ll reach peak earning potential and can even run your own plumbing business.

What Do Plumbers Do?

If you want to work in a supervisory capacity or be able to employ additional plumbers for your business, you will need to become a licensed master plumber.

Necessary Skills

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Plumbing apprenticeships generally last four to five years, during which time you’ll receive roughly 2,000 hours of on-the-job training in the plumbing trade, plus technical instruction. During this time, you’ll learn about local plumbing codes and regulations, how to read blueprints and OSHA safety regulations.Advanced education may cover topics like plumbing fixtures and drainage systems. Unlike pursuing a college degree, however, plumbing apprenticeships are paid.

Challenges

The median pay for plumbers last year was ,880, according to the Bureau of Labor Statistics. Though the labor is tough, hours can be long and the work can be dangerous, becoming a licensed plumber may be well worth it if you have the necessary skills and dedication.

Frequently Asked Questions (FAQs) About Becoming a Plumber

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Becoming a licensed plumber takes at least four to five years, as this is the general length of an apprenticeship. Some aspiring plumbers choose a year or two of vocational school before their apprenticeship. After completing an apprenticeship, you can earn your journeyman and then master plumber license.
As an apprentice plumber, you won’t be able to tackle projects yourself. Instead, you will shadow a journeyman plumber or a master plumber, depending on the program.
License laws and types vary by state. Determine the state that you wish to operate in as a plumber, and research those specific guidelines. The steps below offer a more general look at how to become a plumber.
Plumbers need to be able to cut and solder pipes, diagnose and troubleshoot issues with plumbing systems and interpret (or even draw) blueprints. If you run your own plumbing company, you will also need to handle advertising, scheduling, taxes and billing — or hire someone to do that for you.
An apprenticeship offers on-the-job experience and classroom education. Programs vary by state and organization in terms of structure, length and application process.
Skilled plumbers fulfill a crucial need in society, and demand for plumbers continues to grow. Though the manual labor is often grueling, a career in plumbing can be quite lucrative — and doesn’t require expensive schooling and massive student loan debt.

Once you have your diploma or GED, the next step to becoming a licensed plumbing contractor is either attending plumbing school or completing an apprenticeship. Plumbing school is typically optional (but we’ve got more details below); many plumbing hopefuls skip straight to an apprenticeship. <!–

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While the BLS targets 5% job growth through 2030, the increase in home renovation projects due to the ongoing pandemic may create even more plumbing jobs in the years ahead.

How Much Does It Cost to Adopt a Child?

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Additional Resources

Adoption is a life-changing journey. Whether the choice to adopt comes after years of expensive infertility treatments or is a route you’ve always wanted to take, the choice to welcome a new family member is rarely a financial one, but rather a decision of the heart.

But at some point, prospective adoptive parents have to consider the costs. It’s unlikely your decision to adopt will boil down to numbers. But it helps to know what to expect. 

The figures can vary depending on your adoption journey, from almost nothing to upward of $70,000. But you can use them as a baseline to help you financially prepare for starting a family and to make an informed decision about which type of adoption makes the most sense for you.


How Much Does It Cost to Adopt a Child?

There are three basic types of adoption: domestic infant adoption (sometimes called private adoption), international adoption, and public adoption. 


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But if you’re looking to adopt a baby, private and international adoption are the only two real options. Because of the way the foster care system operates, it’s exceedingly rare to be able to adopt an infant through public adoption. Their primary goal is reunifying families whenever possible, which can take years.     

But regardless of your adopted child’s age, some costs are common to all three, such as the expense of a home study, which involves visits by a social worker and background and financial checks. Other costs are unique to the adoption route you choose, such as the travel expenses involved with international adoption.

And the costs vary wildly, so it’s crucial you understand the ins and outs of each adoption type.


Domestic Infant Adoption

When adopting a baby in the United States, you have two options: adopting through an agency or independent adoption.

Costs of Adopting an Infant Through an Agency: $25,000 – $70,000 

Adopting through an agency is more expensive, but there’s also a higher success rate. Also, some agencies offer a sliding scale for those who need help affording adoption, which can potentially save you a few thousand dollars, depending on your income. However, each state has its own laws that regulate adoption fees, including sliding scale fee structures. 

Average Costs of Domestic Agency Adoption

Agency Fees $15,000 – $45,000
Legal Fees $2,500 – $6,000
Birth Mother Expenses $4,000 – $16,250
Home Study Fee $2,750

Adoption agencies are typically full-service operations. Thus, their fees generally include everything involved in the adoption process, which can be complex. The journey to bring a child home involves many parties, including attorneys, social workers, physicians, counselors, government administrators, and adoption specialists. 

There are also costs associated with matching birth parents and adoptive parents. For example, there are advertising expenses to find expectant mothers. And then there are medical expenses and court costs to ensure the health of the mother and child during pregnancy as well as the safety and security of the child after placement.

When you adopt through an agency, it typically completes the entire process from beginning to end, hence the expense. 

Adoption agencies that charge more include more services. For example, if you find an agency with fees at the lower end, it’s likely because their fee doesn’t include the costs of hiring an attorney, unlimited advertising for birth parents, certain birth mother expenses, or adoption disruption insurance (a guarantee you won’t lose your money if the birth mother changes her mind).

So always ask for a written, line-by-line breakdown of the agency’s costs to see what services its rate covers before signing with it. 

Costs of an Independent Adoption With an Attorney Only:  $10,000 – $40,000

If agency adoption is too expensive but you’d still like to adopt a newborn, you can save a lot of money by hiring an attorney to facilitate an independent adoption. Independent adoption happens when prospective parents locate a birth parent on their own and use an attorney to process the necessary paperwork.

Average Costs of Independent (Attorney) Adoption

Legal Fees $3,000 – $6,000
Advertising Fees $0 – $1,000
Birth Mother Expenses $6,000 – $30,000
Home Study Fee $1,000 – $4,000

The cost of an independent adoption can range from $10,000 to $40,000, though it could go higher based on your circumstances. The final bill depends on how much you need to spend to find an expectant mother and how much you pay for medical and living expenses, which may be regulated by state law. 

Further, adopting independently is a bit like trying to sell a house without a realtor. You must find a birth mom on your own, which means advertising for and vetting birth moms without help. 

So, while it can be cheaper, you still have to go it alone. And if you have trouble finding a birth mother, your costs can quickly add up. Agencies give a flat rate no matter how much advertising it takes. If you have trouble finding someone, you could quickly blow past the $40,000 mark.

Another reason independent adoption costs can vary more widely than those through a private agency is because in most states, adoptive parents won’t have their costs reimbursed if a birth mother changes her mind, what’s commonly called a disrupted adoption. Most adoption agencies build disruption insurance into their fee structures. 


International Adoption: $26,500 – $73,000

Those unfamiliar with the adoption process often believe it’s less expensive to adopt a child from another country. But the reverse is more often true. 

Average Costs of International Adoption

Agency Fees $15,000 – $30,000
Legal Fees $500 – $6,000
Immigration Application Fee $1,000 – $2,000
Dossier Preparation and Clearance $1,000 – 2,000
Home Study Fee $1,000 – $4,000
In-Country Adoption Expenses $2,000 – $10,000
Travel Expenses $5,000 – $15,000
Child’s Passport, Visa, Medical Exam $1,000 – $4,000

The cost of an international adoption can range from just over $20,000 to more than $70,000. The wide variance is due to the different requirements of each country. 

International adoption (also called intercountry adoption) has some similarities to domestic adoption. But it has its own unique steps and expenses that can quickly escalate beyond the cost of domestic adoption.

The costs of international adoptions can include immigration processing and court costs (both in the foreign country and the U.S.), travel expenses, foreign and domestic legal fees, foreign agency fees, passport and visa fees, medical examinations, and in-country adoptions expenses (such as foster care for the child, donations to the orphanage, and payments for the in-country adoption liaisons).

The costs also depend on whether a government or private agency, orphanage, nonprofit organization, attorney, or a combination of entities is managing the adoption. 

Additionally, some international adoptions are finalized in the child’s country of origin, while others must be finalized in the U.S., depending on the laws of your state, further adding to the total cost. And depending on the country’s regulations, you may have to plan an extended stay, which means time off work and (potentially) lost wages.


Public Adoption: $0 – $2,500

The least expensive route to growing your family is unquestionably public adoption, or adopting through the foster care system. It’s very difficult to adopt a baby, though. So this option is best for those who wish to adopt an older child.

Public adoption costs next to nothing because the government subsidizes many associated fees and expenses. 

Average Costs of Public Adoption

Agency Fees Usually $0
Legal Fees $0 – $2,000
Home Study Fee $0 – $500

Federal and state financial adoption assistance programs exist to encourage the adoption of children with special needs that make them difficult to place, such as older children, sibling groups, or those with physical or mental disabilities. 

Thus, most prospective parents who are adopting through public agencies will find their state is often willing to waive most or all of the fees associated with adopting through the foster care system, including both the home study fee and attorney fees. 

Additionally, if you become a foster parent and apply to foster-to-adopt, the government subsidizes some of your future adopted child’s living expenses while you await finalization. 

But if you have your heart set on adopting a newborn, foster care adoption isn’t the route for you. It’s nearly impossible to adopt an infant that way. 

Some babies in the foster care system were abandoned by their biological parents or taken by the state due to abuse, neglect, or drug addiction. But no child in the system — infant or otherwise — is immediately available for adoption. 

The state’s No. 1 priority is to reunite children with their biological families. That includes extensive sessions with counselors and social workers. If that effort ultimately proves unsuccessful, the state next tries to place the child with a biological relative. 

Only after these efforts — which could take several years — are children placed for adoption. Thus, by the time babies in foster care become eligible for adoption, they’re no longer babies. But if they were placed with a foster family, that family gets the first chance at adoption. 
However, if you’re interested in adopting an older child and are prepared to help them work through the trauma, the rewards can be immense. My parents adopted my little brother from foster care at the age of 6, and his presence has enriched our family in myriad ways.

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Factors That Influence Adoption Costs

Every adoption is unique, and though adoption agencies typically try to work within your budget, unforeseen costs can occasionally raise the base projected cost. And that can have a significant impact on your overall family budget.


Birth Mother Expenses

Depending on your state’s adoption laws, a birth mother may be eligible for coverage of certain expenses. You may have to pay medical expenses related to the pregnancy, including insurance coverage if she’s not already covered or eligible for Medicaid.

If you work with an agency, they should take care of helping her find coverage. But you may still be responsible for some medical expenses, such as doctor copays. Once you’re matched with a birth mother, her medical expenses become your medical expenses. 

Adoption agencies typically work these into their overall fee structure but allow for variances that could affect your cost. For example, you may pay more or less depending on what stage of pregnancy the mother’s in when the agency matches you. If you’re matched in the ninth month, there will be fewer expenses.

And if you’re adopting independently, some or all of the medical costs the birth mother incurs as a result of the pregnancy may be your responsibility as defined by the laws of your state. Consult with an adoption lawyer for more information.  

Additionally, in some states, you may need to cover other birth mother expenses. Birth mother expenses are court-approved funds adoptive families provide to help prospective birth mothers with pregnancy-related expenses. In addition to medical care, costs could include living expenses like maternity clothing, groceries, rent, and transportation. 

Some states that allow birth mothers to request living expenses cap the total amount. For example, Ohio caps the amount birth mothers can be reimbursed for living expenses at $3,000 and Connecticut at $1,500. Other states have no cap but permit a judge to set one on an individual basis. 

Thus, these expenses can vary widely from one adoption to another.


Advertising

The longer you have to wait for a birth mother match, the more money an agency must pay toward advertising to find you one. Ask the adoption agency how they deal with this variable cost. Some charge one flat fee regardless of the amount of advertising required; others set a variable cost.

And if you’re doing an independent adoption, you’ll be covering this expense on your own. If you don’t already know a birth mother to adopt from, you’ll need to find one. That means drawing on your personal connections, using social networks or community organizations, utilizing adoptive family websites, posting print ads, or seeking referrals from adoption attorneys. 

It could take a long time to find a birth mother if you don’t have extensive networking options. And that can substantially drive up your adoption costs. Depending on how long it takes you to find someone, fees for print and online advertising can range from several hundred dollars to tens of thousands. 


Attorney Fees

Lawyers are necessary for dealing with the legal aspects of any adoption. These include the original consent to adoption and termination of parental rights as well as the court proceedings to finalize the arrangement. 

However, the fees can vary considerably based on the type of adoption you opt for. Attorney fees can also vary depending on other factors, including:

  • The Complexity of the Case. Will they need to represent you multiple times in court? All adoptions must eventually be finalized before a judge. But some adoptions — such as international adoptions or those in which birth mother expenses must be court-ordered — could require more paperwork or court appearances than others.
  • The Number of Hours the Attorney Works on the Case. Lawyers charge by the hour. Even if you don’t have to appear in court more than once, adoption can involve a lot of paperwork.
  • The Number of Additional Attorneys or Support Staff Needed. Depending on the complexity of your case or who you hire, you may be represented by a law firm rather than a single attorney. Additionally, your lawyer may use a support team to fulfill basic tasks like clerical work.

Depending on your case, rates are often negotiable. And while attorneys often charge by the hour, many offer a flat fee for certain types of cases. 

For example, a family law attorney might charge a flat fee for a straightforward adoption case that requires a simple filing of paperwork and one court appearance. But they might charge by the hour for a more complex case, such as an international adoption.

Regardless, most lawyers offer payment options so clients can find an arrangement that works for their budget. And all lawyers have fee agreements informing clients of costs upfront. So ensure you thoroughly read the agreement beforehand. 


Time Off

Unfortunately, in the U.S., paid parental leave isn’t guaranteed by law, and many workplaces don’t have this benefit. Even when they do, it may not apply to adoptive parents. So check with your human resources department about whether your workplace offers adoption benefits. 

Whether your employer offers paid time off, all adoptive parents are entitled to up to 12 weeks (three months) of leave through the Family Medical Leave Act. The act equally guarantees maternity and paternity leave for biological and adoptive parents.

But it only guarantees your job and health insurance. It doesn’t guarantee paid time off. If your company doesn’t provide paid parental leave, you need to plan for lost wages.


Final Word

The costs of adoption may feel formidable, especially if you have your heart set on adopting an infant through domestic or international adoption. But they don’t have to be insurmountable.

Many resources are available to help families afford to adopt, including options for post-placement reimbursement, like the adoption tax credit. Talk with adoption professionals to explore your options before completely ruling it out. 

Also, talk with other families who’ve adopted. Many are happy to share stories of how they were able to afford adoption, especially if it helps others fulfill their dreams of a family.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Sarah Graves, Ph.D. is a freelance writer specializing in personal finance, parenting, education, and creative entrepreneurship. She’s also a college instructor of English and humanities. When not busy writing or teaching her students the proper use of a semicolon, you can find her hanging out with her awesome husband and adorable son watching way too many superhero movies.

Source: moneycrashers.com

Understanding the Parent Plus Loan Forgiveness Program

Parent PLUS loan forgiveness provides financial relief to parents who borrowed money to cover the cost of their children’s college or career school. It isn’t always a quick fix, but there are certain federal and private programs that might offer the financial assistance needed to help them get on track.

To receive federal relief for Parent PLUS loans, parent borrowers have a few options.

They can consolidate the loan in order to enroll in an Income-Contingent Repayment plan after 25 years, pursue Public Service Loan Forgiveness after 10 years, or choose from a number of private student loan assistance programs or refinancing options.

Keep reading to learn more about what the available student loan forgiveness possibilities are for Parent PLUS loans.

Will Parent Plus Loans Be Included in Student Loan Forgiveness?

Parent PLUS loans are eligible for several of the same student loan forgiveness programs as federal student loans for students, including:

•   Borrower Defense Loan Discharge

•   Total and Permanent Disability (TPD) Discharge

•   Public Service Loan Forgiveness (PSLF)

That said, Parent PLUS loans generally have fewer repayment options in the first place and the eligibility requirements for these forgiveness programs can be strict and may require borrowers to consolidate their PLUS loan, such as with PSLF. This can make it tricky for borrowers to navigate how to use these federal relief programs to their advantage.

Refinancing is another option for Parent PLUS loan borrowers — applying for a new private student loan with an, ideally, lower interest rate. That said, some lenders offer less flexibility for repayment and the fine print can be lengthy, so there’s an inherent risk associated with refinancing Parent PLUS loans. It’s also worth noting that refinancing a PLUS loan will eliminate it from any federal repayment plans or forgiveness options.

Recommended: What Is a Parent PLUS Loan?

Parent Student Loan Forgiveness Program

When it comes to student loan forgiveness, the programs aren’t just available for the students. Parents who are on the hook for student loan debt can also qualify for student loan forgiveness.

As previously mentioned, a Parent PLUS loan may be eligible for Parent Student Loan Forgiveness through two specific federal programs:

•   Income-Contingent Repayment

•   The Public Service Loan Forgiveness (PSLF) Program

There are also a few private student loan forgiveness options, which we’ll get into below.

Income-Contingent Repayment (ICR)

An Income-Contingent Repayment plan, or ICR plan, is the only income-driven repayment plan that’s available for Parent PLUS borrowers. In order to qualify, parent borrowers must first consolidate their loans into a Direct Consolidation Loan, then repay that loan under the ICR plan.

•   A Parent PLUS loan that’s included in a Direct Consolidation Loan could be eligible for Income-Contingent Repayment, but only if the borrower entered their repayment period on or after July 1, 2006.

•   A Parent PLUS loan that’s included in the Federal Direct Loan Program or the Federal Family Education Loan Program (FFELP) is also eligible for ICR if it’s included in the Federal Direct Consolidation Loan.

ICR determines a borrower’s monthly payment based on 20% of their discretionary income or the amount by which their AGI exceeds 100% of the poverty line. After a 25-year repayment term, or 300 payments, the remaining loan balance will be forgiven.

Typically, the IRS considers canceled debt a form of taxable income, but the American Rescue Plan Act of 2021 made all student loan forgiveness tax-free through 2025.

Public Service Loan Forgiveness (PSLF)

Borrowers with Parent PLUS loans may be eligible for Public Service Loan Forgiveness Program, but in order to pursue that option must first consolidate the Parent PLUS loan into a Direct Consolidation Loan.

Then, after they’ve made 120 qualifying payments (ten year’s worth), borrowers become eligible for the Public Service Loan Forgiveness Program (PSLF). The parent borrower (not the student) must be employed full-time in a qualifying public service job. PSLF also has strict requirements such as certifying employment so it’s important to follow instructions closely if pursuing this option.

The Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is another option for Parent PLUS borrowers if some or all of their 120 qualifying payments were made under either a graduated repayment plan or an extended repayment plan. The catch here is that the last year of their payments must have been at least as much as they would if they had paid under an ICR plan.

Refinance Parent Plus Loans

Refinancing a Parent PLUS loan is another option that could provide some financial relief.

For borrowers who don’t qualify for any of the loan forgiveness options above, it may be possible to lower their monthly payments by refinancing Parent PLUS student loans with a private lender.

In doing so, you’ll lose the government benefits associated with your federal loans, as briefly mentioned above, such as:

•   Student loan forgiveness

•   Forbearance options or options to defer your student loans

•   Choice of repayment options

Refinancing a Parent PLUS loan into the dependent’s name is another option, which some borrowers opt for once their child has graduated and started working. Not all loan servicers are willing to offer this type of refinancing option, though.

Transfer Parent Plus Student Loan to Student

Transferring Parent PLUS loans to a student can be complicated. There isn’t a federal loan program available that will conduct this exchange, and, as mentioned above, some private lenders won’t offer this option.

That said, some private lenders, like SoFi, allow dependents to take out a refinanced student loan and use it to pay off the PLUS loan of their parent.

Alternatives to Student Loan Forgiveness Parent Plus

When it comes to Parent PLUS loans, there are a few ways to get out of student loan debt legally, including the scenarios outlined below.

Student Loan Forgiveness Death of Parent

Federal student loans qualify for loan discharge when the borrower passes away. In the case of Parent PLUS loans, they are also discharged if the student who received the borrowed funds passes away.

In order to qualify for federal loan discharge due to death, borrowers must provide a copy of a death certificate to either the U.S. Department of Education or the loan servicer.

Recommended: Can Student Loans Be Discharged?

State Parent PLUS Student Loan Forgiveness Programs

Many individual states offer some sort of student loan repayment assistance or student loan forgiveness programs for Parent PLUS loan borrowers.

For an overview of options available in different states, you can take a look at The College Investor’s State-by-State Guide to Student Loan Forgiveness . For information on student loan and aid available take a look at the SoFi guide on state-by-state student aid available for borrowers.

Disability

In the event of the borrower becoming totally and permanently disabled, a Parent PLUS loan may be discharged. To qualify for a Total and Permanent Disability (TPD) discharge , borrowers must complete and submit a TPD discharge application, as well as documentation showing that they meet the requirements for being considered totally and permanently disabled. Note that in order to qualify for TPD, the parent borrower must be considered disabled. This type of forgiveness does not apply to Parent PLUS loans in the event that the student becomes disabled.

Bankruptcy

If a borrower can demonstrate undue financial hardship upon repaying the student loan, they might be able to discharge their Parent PLUS loan. Note having student loans discharged in bankruptcy is extremely rare. Proving “undue hardship” varies depending on the court that’s granting it, but most rulings abide by the Brunner test, which requires the debtor to meet all three of these criteria in order to discharge the student loan:

•   Poverty – Maintaining a minimal standard of living for the borrower and their dependents is deemed impossible if they’re forced to repay their student loans.

•   Persistence – The borrower’s current financial situation will likely continue for the majority of the repayment period.

•   Good faith – The borrower has made a “good faith” effort to repay their student loans.

Closed School Discharge

For parent borrowers whose children attended a school that closed while they were enrolled or who withdrew from the school during a “lookback period” of 120 days before its closure, a Closed School Discharge is another available form of student loan forgiveness.

In some circumstances, the government may extend the lookback period even further. For example, The Department of Education has changed the lookback period to 180 days for loans that were issued after July 1, 2020.

Borrower Defense

Borrower Defense Loan Discharge is available to Parent PLUS borrowers whose children were misled by their college or university or whose college or university engaged in certain forms of misconduct or violation of state laws.

To make a case for borrower defense, the Parent PLUS borrower must be able to demonstrate that their school violated a state law directly related to their federal student loan.

Explore Private Student Loan Options for Parents

Banks, credit unions, state loan agencies and other lenders typically offer private student loans for parents who want to help their children pay for college and refinancing options for parents and students.

Refinancing options will vary by lenders and some may be willing to refinance a Parent PLUS loan into a private refinanced loan in the student’s name. In addition to competitive interest rates and member benefits, SoFi does allow students to take over their parent’s loan during the refinancing process. Interest rates and terms may vary based on individual criteria such as income, credit score, and history.

If you decide refinancing a Parent PLUS loan makes sense for you, SoFi makes it simple. The application process is entirely online and SoFi offers flexible repayment options to help you land a loan that fits your budget. You can find your rate in a few minutes and checking if you prequalify won’t affect your credit score.*

The Takeaway

Parent PLUS Loan forgiveness offers financial relief to parents who borrowed money to help their child pay for college.

To receive federal relief for Parent PLUS loans, parent borrowers can enroll in an Income-Contingent Repayment plan, pursue Public Service Loan Forgiveness, transfer their student loan to another student, take advantage of a state Parent PLUS student loan forgiveness program, or opt for private student loan assistance or refinancing.

Learn more about refinancing a Parent PLUS loan with SoFi.


*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Source: sofi.com

Thinking about Rolling Your 401(k) into an IRA? 7 Deciding Factors to Consider

The Department of Labor has outlined new rules for advisers to follow when rolling over retirement plans. Whether it is a 401(k) to an IRA or an IRA from one custodian to another, there are several considerations that need to be evaluated before making a change. If you are initiating a rollover on your own, it may be beneficial for you to evaluate these items as well.

You should be able to get all the information you need on your plan from your statements, Annual Participant Fee Disclosure and Summary Plan Description. If you do not have access to these documents, you can usually request them from your human resource department.

All-In Fees and Expenses

Before deciding whether to do a rollover, you will want to compare the fees within your 401(k) plan vs. the fees for the IRA. Fees in the 401(k) could include any mutual fund loads, plan expenses and any underlying fees. Sometimes the fees may be higher in your 401(k), but there may be additional benefits to keeping your funds in the 401(k) wrapper.

It would be up to you to decide whether any benefits are worth the fees. For example, if you are opening an IRA and moving over to an investment adviser there will be additional management fees paid to your adviser, but you may also receive financial advice, retirement planning or wealth management services.

Available Services

Some retirement plans, such as 401(k)s, provide added creditor protection, the ability to take out a loan or take hardship withdrawals, which are not available with IRAs. In certain circumstances you may be able to keep some asset protection if 401(k) funds are rolled into a separate IRA and not commingled with other IRA funds. Some 401(k) providers provide investment education to participants that may be valuable if you are a younger investor.  You will also want to look at your vesting schedule and company match to determine whether they may be affected. In addition, some retirement plans offer Roth 401(k) contributions, which may not be available to you otherwise.

Available Investments and/or Products

Several 401(k)s offer participants limited investment options. On one hand, that could be viewed as a positive, because when there are too many choices it can confuse participants and make it harder to manage the plan. However, some plans’ limited options may be  more expensive, such as actively managed funds, and they might not offer any low-cost index options.

If you roll over funds into an IRA you then have access to a much wider universe of investments. That said, this should not be your only decision criteria. Some company retirement plans offer a “BrokerageLink” option, which allows you to move funds from the “core” 401(k) account to a brokerage account –  another way to access more investment options. Some plans have restrictions on what can be invested in a BrokerageLink so you would want to consult the plan document before deciding.

Guaranteed Income/or Interest Rates

Are you invested in anything earning a guaranteed interest rate that you will lose by moving from a 401(k) to an IRA or other plan? For example, TIAA CREF’s 401(k) offering has TIAA Traditional, which could be earning 3%-4% –  a great return in this environment. You may not want to roll out funds into an IRA and lose access to this option.

Tax Considerations

If you are required distribution age but still working past retirement (providing you are not an over 5% owner in the company), you can defer taking money out of your 401(k). Unfortunately, if you have an IRA on the side, that IRA is subject to required distributions at age 72, even if you continue to work. If you leave the funds in the 401(k) you can still contribute and don’t have to take money out.

One caveat related to the Roth part of a 401(k): If you are age 72 and a greater than 5% owner or retired you have to take a distribution from the Roth side. A way to get around this is to roll the Roth 401(k) balance into a Roth IRA prior to age 72.

Also, if you happen to be in a zero-income year and all you have is retirement funds and need cash, it may make sense to take a taxable distribution rather than do a rollover.

Distribution Considerations

If your 401(k) retirement account is invested in an insurance product or annuity you will want to evaluate whether there are any surrender charges. Usually annuities cannot be moved to IRAs in kind. Some annuity products may have certain benefits that will be lost if liquidated, so you will want to make sure you understand how your product works before making a decision.

Some plans may offer annuity options rather than a lump sum, which would be lost if you roll your 401(k) over to an IRA. You will want to look at the financial implications of the lump sum vs. the annuity options to see which option is better for your situation, especially if you have a spouse who can receive survivor benefits.

You will also want to check if there are any in-service distributions options or guaranteed payment options.

Beneficiary Considerations

If you are married, your 401(k) must list your spouse as beneficiary unless your spouse signs a waiver. You can list anyone on an IRA as a beneficiary, so you may want to review your estate planning and beneficiaries if you make any changes.

Senior Financial Adviser, Evensky & Katz/Foldes Financial Wealth Management

Roxanne Alexander is a senior financial adviser with Evensky & Katz/Foldes Financial handling client analysis on investments, insurance, annuities, college planning and developing investment policies. Prior to this, she was a senior vice president at Evensky & Katz working with both individual and institutional clients. She has a bachelor’s in accounting and business management from the University of the West Indies, she received an MBA at the University of Miami in finance and investments.

Source: kiplinger.com

Corporate Social Responsibility (CSR), Explained

Corporate social responsibility, or CSR, is a type of self-regulation that a business uses to enhance the well-being of communities and society through ethical, environmental, and social measures.

By investing in companies that practice CSR, investors have the opportunity to use their own wealth-building strategies to make a positive impact on the world.

What is Corporate Social Responsibility?

Corporate social responsibility (CSR) refers to a company’s dedication to establishing business decisions that positively impact society. Usually, these business decisions support socially responsible movements, like environmental sustainability, ethical labor practices, and social justice initiatives.

Ideally, CSR strategies work in tandem with the traditional business objectives of hitting revenue and profit goals, and other metrics investors may find on a financial statement.

There is no codified set of standards that explain corporate social responsibility. Companies choose to enact CSR policies on their own initiative. It can take many forms depending on a company or an industry, but generally, CSR policies promote economic, social, and environmental sustainability.

However, the International Organization for Standardization (ISO) released guidelines for corporate social responsibility in 2010. Known as ISO 26000:2010 , these guidelines are suggestions, not requirements, that can help put companies on track to further CSR principles.

Why CSR Is Important

Corporate social responsibility is important because companies can use their financial position and operations to build more ethical business models and a better world. When the companies enact socially responsible policies prosper, those practices become more commonplace and widespread.

Additionally, investors increasingly focus on more than traditional business valuation methods when making investment decisions. Investors want to put money into companies that support socially responsible movements, so they may be attracted to companies with CSR policies.

In other words, investing in companies that practice corporate social responsibility gives investors the chance to vote with their wallets on how they want the companies around them to behave.

Recommended: What is ESG Investing?

4 Types of Corporate Social Responsibility

Corporate social responsibility is an umbrella term that captures a wide array of policies that a company can enact. CSR-focused companies may target their efforts on one or more specific social, economic, or environmental areas of concern. The following are some of the most common areas of CSR:

1. Environmental Sustainability

Companies are increasingly focusing on environmental sustainability when making business decisions. With climate change threatening to cause severe impacts worldwide, companies are committing to creating sustainable production methods, distribution, and overall business practices to reduce carbon footprints.

For investors, sustainable investing could mean seeking out companies that promise to hold to sustainable business practices—and doing the research to ensure they’re keeping that promise in real life. Additionally, it could mean focusing on companies that are specifically involved in creating the products that allow for environmental sustainability in the long term, such as renewable energy, biofuels, or hybrid cars.

Recommended: How to Invest in EV Stocks

2. Philanthropy

One of the ways large companies might align themselves with CSR values is by supporting philanthropic efforts. By donating money, products, or services to nonprofit organizations and social causes, a company can show the public what it values and how its furthering causes.

Recommended: How to Make End-of-Year Donations

3. Ethical Labor Practices

Corporations that commit to ethical labor practices, such as focusing on diversity and inclusion or having a zero-tolerance policy on sexual harassment, may garner more favor among investors looking to support a socially responsible company.

Recommended: How to Combine Financial Well-Being and Diversity and Inclusion Initiatives

4. Volunteering

Another way almost any business can get in on CSR might be to support local volunteering efforts by sending out their representatives or fundraising for other volunteering organizations and movements.

Companies might also support volunteerism by offering their employees paid time off specifically for that activity. Some companies provide employees several days off per year, which they can use to participate in any volunteering effort they choose.

Recommended: 34 Charities To Support This Year

Examples of CSR

Many companies have enacted corporate social responsibility initiatives, and the trend is growing. According to one study, 92% of companies in the S&P 500 published sustainability in 2020, up from 20% in 2011. Here are a few examples of CSR policies at large corporations:

•   Starbucks (SBUX): The coffee giant has committed to hiring a diversified workforce, including hiring thousands of veterans, refugees, and disadvantaged youth.

•   Levi Strauss (LEVI): The apparel maker launched the Levi’s® Music Project, an initiative that looks to provide young people with music education and community resources.

•   Ford Motor Company (F): The carmaker is pushing to have 50% of its global sales be electric vehicles (EV) by 2030 to help address climate change.

•   Salesforce (CRM): The software company says it has given about $240 million in grants, 3.5 million hours of community service, and provided donations to more than 39,000 nonprofits and education institutions.

•   The Coca-Cola Company (KO): The beverage company is focusing on water conservation, saying it will push to responsibly use water in its production process and advocate for smart water policies.

Benefits of Corporate Social Responsibility

There are many reasons for a company to adopt and execute corporate social responsibility policies. First and foremost, CSR practices help promote a relatively better society and environment. By following socially responsible protocols, companies could have the opportunity to make significant social, economic, and ecological changes. As noted above, investors are increasingly looking to put money into companies that adhere to CSR.

Beyond these direct positives, CSR policies can also boost a company’s competitiveness by benefiting the firm in the following ways:

•   Stronger brand image: Corporate social responsibility policies can help create a positive image for a company, attracting consumers, employees, and other stakeholders.

•   Employee retention: Talented employees may stay with a company longer when they feel they are working for a business that has strong CSR policies. Additionally, this reputation can help attract new employees.

•   Reduced regulatory burden: A comprehensive CSR policy can help a company navigate relationships with regulatory bodies, especially as governments establish more rules around sustainability.

The Takeaway

Corporate social responsibility is one of several business models companies are using to navigate a changing world. By investing in companies that support those practices, investors could have the opportunity to positively impact the world while also potentially building their nest eggs.

However, it can take a lot of work for investors to determine what companies have the best CSR policies and what companies are truly adhering to their initiatives. So if you want to invest in companies that support CSR policies, it may be best to start small rather than build a whole portfolio around CSR stocks.

SoFi Invest® allows you to start investing today and build a portfolio with whatever strategy you desire. With active investing, you can trade stocks of brands you know and believe in and discover new opportunities based on your interests along the way.

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Dear Penny: Is Using Retirement Money So My Daughter Can Graduate a Mistake?

Dear Penny,
A big advantage of Parent PLUS loans is that you can qualify for something called income-contingent repayment. Basically, your payment is capped at 20% of your disposable income. You’re planning to retire soon, so I’m assuming your income will drop soon as well. That means you could qualify for an extremely low payment once your daughter graduates.
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She is a good kid with some special problems that she overcomes daily. I want her to have this degree and a chance in life. She worked very hard to overcome all of the physical and mental challenges in her life, BUT expenses are starting to affect my retirement. Any advice?
Sometimes I get antsy when parents talk about spending retirement money on their child’s education. But we’re talking about one year of college, not four. I think you’d deeply regret not giving your daughter the financial support she needs to make it through this final year.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
Contact the financial aid office for your daughter’s school if you haven’t already done so. The Free Application for Federal Student Aid, or FAFSA, bases financial aid on income from two years earlier. For example, aid for the 2022-23 school year will be based on 2020 income. But some schools offer a process called professional judgment where administrators can adjust FAFSA information based on major life changes, like a parent’s retirement, on a case-by-case basis.
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Your daughter has no doubt overcome her challenges thanks to her own grit, but also because of your love and support as a parent. You’re making a sacrifice to pay for her last year of school because you believe in her. Once she graduates, paying off any debt you’ve incurred will be another challenge you’ll need to conquer together.
-J.
Keep in mind, a Parent PLUS loan is only an option if your daughter is considered a dependent student. For example, if she’s 24 or older or she has dependent children of her own, unfortunately, you wouldn’t be eligible.
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Dear J.,
With private student loans — whether you take them out in your name or co-sign for your daughter — you’re at the mercy of your lender if you’re struggling with payments. So I’d vote in favor of a Parent PLUS loan, even if you find a private loan with a lower interest rate.
If you can’t get a Parent PLUS loan, I’d suggest splitting taking half from your retirement funds and a private loan for the other half. Neither is an ideal option, but sometimes life forces us to choose between less-than-perfect options.
What makes me nervous about using retirement money is that virtually everyone’s investments have taken a hit in recent months. You want to limit your withdrawals as much as possible right now so that your money can recover. But at least since you’re 67, you won’t pay an early withdrawal penalty.
Now let’s address your daughter’s role. I don’t know if she currently has a job. If she is able to work some to help defray costs without jeopardizing her studies, that should be on the table.
My daughter is in her last year of college. I don’t have any more money to pay for it. So for her last year, should I take from retirement monies or get a loan? 
If financial aid can’t make up the shortfall, a Parent PLUS loan is a good solution. A Parent PLUS loan is a federal student loan that you, as the parent, are responsible for repaying.
Source: thepennyhoarder.com

But I want her to focus on her studies so that she can actually complete her final year of coursework in a year. Stretching out the timeline further could pose a greater risk to your retirement. So I wouldn’t ask your daughter to get a job if she’s not already working or work more hours if she has a job.

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By taking half from your retirement and half as a loan, you can minimize the damage to your nest egg while taking less debt into retirement. If you’re able to work just a bit longer to pay some of these expenses in cash, even better.

Guide to Cross-Collateralized Loans

One type of loan that isn’t often discussed is cross-collateralized, also known as cross-collateral loans, which is a type of secured loan. If someone is looking to take out multiple loans through the same financial institution, it’s important that they understand what cross-collateralization is and when it can happen.

So, what is a cross-collateralized loan? Keep reading to find out.

What Is Cross-Collateralization?

Cross-collateralization involves a borrower using an asset they already used as collateral on a loan as collateral again for a second loan. Collateral is an asset that acts as a loan guarantee. If the borrower fails to make their loan payments, the lender has the option to seize the collateral or to force the sale of the collateral to recoup its losses.

In short, cross-collateralization involves using the same collateral for one loan to serve as collateral for another loan at the same time.

Recommended: Using Collateral on a Personal Loan

How Does Cross-Collateralization Work?

The way that cross-collateralization works is that the same form of collateral is used to back more than one loan. The collateral used needs to guarantee the loan value. For example, if someone takes out an auto loan, the car (which equates to the value of the loan) is used as collateral. For cross-collateralization to work, that car also needs to be worth the same or more than the value of the second loan.

A common example of cross-collateralization is a second mortgage. If someone takes out a second mortgage on their home, the home is going to be used as collateral for both the primary mortgage used to purchase the home and the new second mortgage.

While cross-collateralization can involve using the same type of asset against one another, it doesn’t have to happen this way. For example, a lender can use a borrower’s car as collateral for a new loan that isn’t an auto loan, even though the car is already being used as collateral for the auto loan.

When Is Cross-Collateralization Used?

It’s more common to come across cross-collateralization in practice at credit unions and auto lenders. Unlike banks, credit unions are owned by the members of the credit union. To help protect this group against various losses, credit unions often use cross-collateralization to gain some extra security. Credit unions tend to have more favorable loan terms than larger financial institutions and banks, and members may secure those better terms by agreeing to cross-collateralization.

An example of this would be if a credit union member wants to finance their car through their credit union. Fast forward six months, and they want to take out an unsecured loan with a low-interest rate. The reason the credit union can offer an unsecured loan to the member at such a great rate is because they are actually securing the loan with the existing collateral from the member’s car loan.

The lender is legally obligated to disclose cross-collateralization, and the borrower must consent. It’s important to ask about cross-collateralization practices when taking out a new loan, however. A lender could include a clause in the loan agreement allowing it to cross-collateralize any collateral you used on any loan with that lender, and the wording in such a clause can vary by lender.

Once a form of collateral is being used to secure multiple loans, the borrower can’t sell that collateral. This means that a borrower who thinks their vehicle is securing only their auto loan may be unable to sell the vehicle if it is acting as collateral for another loan, whether or not the lender informed them verbally that cross-collateralization was happening.

How Can You Get Out of Cross-Collateral Loans?

Getting out of a cross-collateralized loan without paying it off in full can be very difficult. And it may not be as simple as transferring the loan to another lender. It’s usually quite challenging and expensive to move a cross-collateral loan to another lender, which can leave a borrower stuck with whatever rates and terms were offered to them when they took out the loan. That’s why it’s a really good idea to read the fine print of any loan agreements before signing and confirming whether a bank or credit union plans to start a cross-collateral loan.

Pros and Cons of Cross-Collateral Loan

Pros Cons
Typically easy to qualify for Larger risk of losing collateral
Potentially low cost Tied to just one lender
Allows borrowers to leverage existing assets Unfavorable terms may unchangeable without a change in lender

There are some major advantages and disadvantages associated with cross-collateral loans that are worth taking into consideration before signing any loan documents.

Benefits

Some of the benefits of a cross-collateral loan include:

•   Ease of qualification. Because cross-collateral loans are secured, they can be easier to qualify for than unsecured loans, for which the lender takes on more risk. Applicants with low credit scores may find it easier to qualify for this type of loan than some others.

•   Lower cost. General cross-collateral loans tend to be less expensive than unsecured loans. This type of loan tends to come with lower interest rates, which could equal savings over the life of the loan, and longer repayment terms, which could lower monthly payments but increase total interest cost.

•   Allows borrowers to leverage existing assets. Cross-collateral loans use an asset that is already trapped in an existing loan, and allows the borrower to get more value out of it by using it to ensure more loans.

Drawbacks

There are some serious downsides associated with cross-collateral loans that are worth thinking carefully about.

•   Larger risk. If the borrower isn’t able to repay their debts, the lender can seize the asset acting as collateral.

•   Tied to just one lender. With a cross-collateral loan, multiple of the borrower’s assets are being financed through one lender which can make it hard and expensive to ever switch to a lender offering more favorable terms.

•   Unfavorable terms. Collateralized loans, especially cross-collateral loans, can have stricter terms to meet in order to protect the lenders on subsequent loans.

Cross-Collateralization and Bankruptcy

Cross-collateralization can become particularly complex during bankruptcy. For example, a borrower of a cross-collateral loan (using their car as collateral) who files for Chapter 7 bankruptcy will be required to either reaffirm the debt or surrender their car. If they choose to reaffirm the debt and that loan is with a financial institution that has secured other sources of debt to the car, then they will need to pay off all of those debts in order to keep their car. Don’t forget, that borrower may not even be aware that some of their loans were cross-collateralized.

How cross-collateralization affects bankruptcy depends on the type of bankruptcy filed. Anyone dealing with cross-collateralization complications during bankruptcy may find that consulting a bankruptcy attorney will help them determine what their next steps should be.

Recommended: Getting Approved for a Personal Loan After Bankruptcy

Applying for SoFi’s Personal Loans

For someone looking for an alternative to a cross-collateralized loan with their existing bank or credit union, taking out an unsecured personal loan through a different financial institution may be one option to consider. Personal loans can be used to finance a variety of purchases, with the exception of higher education expenses and home purchases, typically.

SoFi Personal Loans offer fixed rates, no fees, and a variety of repayment terms.

Check your rate on a personal loan from SoFi

FAQ

Is cross-collateralization legal?

Yes, cross-collateralization is legal. Many banks and credit unions practice cross-collateralization.

Who can and can’t cross-collateralize?

Borrowers who already have a secured loan at a financial institution may qualify for cross-collateralization. Lenders don’t always inform borrowers verbally that they are participating in cross-collateralization, so it’s worth confirming whether or not this is happening before taking on a second loan through the same lender.

Can you get out of cross-collateralization?

A major downside of cross-collateralized loans is that once a borrower has multiple sources of debt through the same lender that are cross-collateral loans, it can be difficult to move them to another lender. Paying off the loan is usually the best option for getting out of this type of loan.


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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Guide to Refinancing Your Student Loans After Marriage

After getting married, you’ll start to merge your life, your home, and possibly your finances with your partner. As you plan for the future, it’s helpful to consider the implications of student loans and marriage—which can affect your credit, your ability to get a home mortgage, and even the repayment of your student debt.

Consolidating your federal loans or refinancing student loans after marriage may be options to consider as you begin handling finances in your marriage and working together to reach your financial goals

Student Loans and Marriage

There are currently over 45 million borrowers in the U.S. and the total amount of student loan debt is $1.7 trillion. So the odds are high that either you or your partner may have student loans. As you begin planning for your financial future together, it’s helpful to look at how marriage can affect student loan payments.

Recommended: What is the Average Student Loan Debt?

What Happens to Student Loans When You Get Married?

If you haven’t already had a conversation about student loans and marriage before tying the knot, you and your partner should sit down and discuss your individual student loan debt: how much you have, whether you have federal or private student loans, as well as what your balances, payment status, and monthly payments are. It’s important to share this information since getting married may change your debt repayment plans.

If someone has federal student loans and is on an income-based repayment (IBR) plan when they get married, for example, their monthly payments may increase post-marriage as income-based repayment plans are determined by household income and size. Depending on how a couple chooses to file their taxes, the government may take a new spouse’s salary into account when determining what the borrower’s monthly payments should be.

Because federal student loan borrowers on an income-based repayment plan have to recertify each year, the current year’s income is taken into account which may be higher after marriage if both spouses work. If the borrower’s new spouse doesn’t earn income then they may actually see their monthly payment requirements drop as their household size went up, but their household income remained the same.

Household income also affects how much student loan interest a borrower can deduct on their federal taxes. It’s worth consulting an accountant if a newly married couple needs help figuring out where they stand financially post-marriage.

It’s also important to be aware of how marriage affects your credit score as how someone manages their student loan debt is a factor. Since spouses don’t share credit reports, marrying someone with bad credit won’t hurt your credit score. That said, when it comes time to apply for a loan together, a bad credit score can make getting approved harder—which is another reason it’s key to get on the same page about repaying any debt on time.

Recommended: Types of Federal Student Loans

Refinancing Student Loans After Marriage

Refinancing student loans gives borrowers the chance to take out a new student loan with ideally better interest rates and terms than their original student loan or loans. Some borrowers may choose to consolidate multiple student loans into one newly refinanced loan to streamline their debt repayment process.

The result? One convenient monthly payment to make with the same interest rate and the same loan servicer instead of multiple ones.

As tempting as it may be to combine debt with a spouse and work toward paying it off together, married couples typically cannot refinance their loans together and each spouse would need to refinance their student loans separately. But even though a couple can’t refinance their student loan debt together, they’ll still want to be aware of what’s going on with their partner’s student loans.

Recommended: Top 5 Tips for Refinancing Student Loans in 2022

How to Refinance Student Loans After Marriage

Refinancing student loans after marriage looks the same as it does before marriage and is pretty straightforward. The student loan borrower will take out a new loan, which is used to repay the original student loan.

Ideally, this results in a better interest rate which will help borrowers save money on interest payments, but this isn’t a guarantee. Before refinancing, it’s important that borrowers shop around to find the best rates possible as factors like their credit score and income can qualify them for different rates.

Borrowers have the option of refinancing both federal and private student loans, but it’s worth noting that refinancing a federal student loan into a private one removes access to valuable federal benefits like income-driven repayment plans and loan forgiveness for public service employees.

Refinancing vs. Consolidating Student Loans After Marriage

Borrowers can choose to refinance or consolidate their student loans before or after marriage.

If a borrower has multiple federal student loans, then they can choose to consolidate their different loans into one Direct Consolidation Loan. This type of loan only applies to federal student loans and is offered through the U.S. Department of Education.

This type of loan takes a weighted average of all of the loans consolidated to determine the new interest rate, so generally this is an option designed to simplify debt repayment, not to save money. If a borrower chooses to consolidate through a private lender, they will be issued new rates and terms, which may be more financially beneficial.

Consolidating through a private lender is a form of refinancing that allows borrowers to take out one new loan that covers all of their different sources of student loan debt. While some private lenders will only refinance private student loans, there are plenty of private lenders that refinance both private and federal loans. As mentioned earlier, refinancing a federal loan means losing access to federal protections and benefits.

Refinancing can be advantageous if the borrower is in a better financial place than they were when they originally took out private student loans. If they’ve improved their credit score, paid down debt, and taken other steps to improve their financial picture, they may qualify for a better interest rate that can save them a lot of money over the life of their loan.

Another option in refinancing student loans after marriage is co-signing a partner’s loan. Doing so may mean that you can leverage greater earning power and possibly better credit, but it also means both partners are responsible for the loan, and can put one partner at risk in the event of death or divorce.

Student Loan Refinancing With SoFi

SoFi refinances both federal and private student loans, which can help borrowers save because of our flexible terms and low fixed or variable rates. Borrowers won’t ever have to worry about any fees and can apply quickly online today.

Learn more about refinancing student loans with SoFi.

FAQ

What happens when you marry someone with student loan debt?

If someone’s new spouse has student loan debt, this indirectly affects them. While the debt won’t be under their name or affect their credit score when it comes time to apply for credit products with their spouse (such as a mortgage loan) their credit score and current sources of debt will likely be taken into account.

Is one spouse responsible for the other’s student loans?

No one spouse is directly responsible for their spouse’s student loans, but it’s important to work together to pay off student loan debt. Again, once it comes time to apply for a joint loan, any student loan debt can have an effect on eligibility.

Does getting married affect student loan repayment?

Getting married can affect student loan repayment if a borrower is on an income-based repayment plan for their federal student loans. This type of repayment plan takes household size and income into account when determining what the borrower’s monthly payment should be. If their spouse brings in an income they may find their monthly payments are higher, but if their spouse doesn’t have an income their payments may become smaller.


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SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL SEPTEMBER 1, 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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