Louis Rizoli: [00:00:00] My goal in this is that you’re going to come out of college with no debt. And whatever debt your mother and father have, that’s their problem. Your mother and father are are going to pay whatever they can. And when it comes down to how much they think you should be taking out for a loan. I don’t know if it’s going to work 100 percent but my goal is right now that she walk out of college without any lumps.

Jonathan Hughes: Hi folks and welcome to the MEFA Podcast. My name is Jonathan Hughes and you just heard from our guest on the show today. And if you’re a grandparent who is or wants to start saving for your grandchildren, [00:01:00] then this is the show for you. Honestly, this is a topic that I’ve wanted to do on the show for a long time.

We know here at MEFA that the cost of college is going up and how important saving is. And how parents don’t have to shoulder that burden on their own. Grandparents, aunts and uncles, friends of the family can save for students. And we hear from grandparents. All the time who want to help out in this way.

So if this is you, listen to our guest on the show today. And if you have questions, please remember that you can reach out to us at 1-800-449-MEFA or you can email us at [email protected] or you can find us on Facebook at @MEFAMA, on X at @MEFATweets and on Instagram at MEFA_MA.

So I will be back after the interview to wrap up the show, but for now, let’s meet our guest on the MEFA Podcast.

Louis Rizoli: [00:02:00] My name is Lou Rizoli. I live in Massachusetts Westwood. I’m 75 years young. And I am a father and a grandfather and I, My oldest, I have three grandchildren, one’s 17, 12, and 14, and the 17 year old one is a senior in high school getting ready to go to college.

I started into the MEFA almost 17 years ago, within a year after she was born, and I’ve just been putting in, what I can over the years, and I think it’s an absolutely fantastic program, and I’m sure we’ll get into some of the questions a little bit later.

Jonathan Hughes: Yeah so you’ve been saving, then, for your grandchild?

Louis Rizoli: Absolutely yeah.

Jonathan Hughes: And have you been saving for all three of your grandchildren?

Louis Rizoli: Yeah. As each one obviously as each one came into the world I, I opened up a MEFA account being in [00:03:00] Massachusetts and there being in Connecticut, it doesn’t matter. I opened it through MEFA and they go, which is, I can’t say enough good things about MEFA.

They’ve been absolutely excellent. They’ve got it for any of you. Grandparents watching this, you can see the go on. They’ve got a number of sessions that you can just tune into and look and they’ll explain it to you. It’s, and but it honestly, it’s very simple. It’s it’s almost like a no brainer.

You can put the, in my case, I just try to put money in. When I can, but mostly like at the end of the year, the holidays, and then at their birthdays. A number of other people that I know that are in it, have a deduction coming out of their payroll every month.

It’s just whatever, whatever is easier for whoever is whoever’s a grandparent may be involved in this.

Jonathan Hughes: I actually want to hear a little bit about you, and what your background is, and [00:04:00] your education maybe, And, does that kind of feed into why you think this was important?

To do this, your own attitudes about education.

Louis Rizoli: I’m an attorney. I grad, my undergraduate was at Holy Cross College in Worcester. And like most Holy Cross grads, we’re crazy and we think that it’s the greatest place on earth. And we continue to think that no matter how many years we’ve been out of the, we’ve graduated from school.

Jonathan Hughes: Always nice to hear that, right? You’re happy with your college? Yeah,

Louis Rizoli: My wife says it’s something in the drinking water because you’re all, we all come out of there and, and say that, that there’s no other place like the hill and the Worcester. I’m a real.

World traveler, Jonathan. I grew up in Milford, Mass, and I went 30 miles west to Holy Cross in Worcester, and then I went 30 miles east to Suffolk Law School in Boston. Never more [00:05:00] than 30 miles from the wounds, they said. I actually I went to law school nights to Suffolk Knights and I worked at the state house and then I became an assistant attorney general.

And then God must look kindly on me because it’s at the age of 35, I became the chief legal counsel to the Massachusetts house of representatives where I stayed for 25 years. And I also taught law at Suffolk Law School as an adjunct professor. I’ve got somewhat of a background in finances.

I’m certainly no expert, but, even in my job at the Statehouse, people would come to me and talk about, what should we do? Because, they have one of those 403B plans where you can put money in coming out of every paycheck. And I give people advice. I look at that. And, the 401ks, if you’re in, in private working in the private sector as just great things to do.

You just don’t, [00:06:00] you don’t think about it. You just put the money in and then all of a sudden you go, wow this is here and, I’m pretty much retired now. And. It’s Oh, wow. That’s what I put in when I was working at the state house. And then, this is really, this is good.

And quite frankly Jonathan, that’s one of the reasons that I decided to go into the MEFA program, because I saw how. How putting a little money aside every year, into my, the plan that they have with the state worked out very well for me and my family.

Jonathan Hughes: What about the 529 plan was attractive specifically as a way to save?

Louis Rizoli: One of the biggest things when I looked at it was, we all worry, we all like to earn high interest on whatever we have. And then we don’t like paying taxes at the end of the year on the interest that we’ve earned. And the, one of the biggest selling points was, [00:07:00] okay, if you use this for education, for, your grandchildren, you don’t.

Pay taxes, they don’t pay taxes. I don’t pay taxes. And it’s okay, if there’s some way that I can help the grandchildren out here and it’s not gonna affect, having a, for me to take the money out to, to have to pay taxes on it, it sounds like a win-win situation.

Jonathan Hughes: And as far as setting up the account itself, do you remember much about that being, easy or did you, do you remember did you go into a branch? Did you call up? Did you do it online? Did you get assistance with that? What was that process like?

Louis Rizoli: It was a piece of cake. I did it online with assistance calling up MEFA and going into it. And it was really easy to set up.

It took no time at all. And then of course, it’s Fidelity that you’re working with the program. And I talked to the people at Fidelity and they have two or three different funds that you can put the money [00:08:00] in and you pick one of them. And I just picked the Fidelity funds and let them.

Decide how to invest it, they have index funds, they have whatever it is. I don’t, I haven’t looked at it in a long time, but when I did, the fidelity funds look like that they had done a little bit better than the others. And, you just put it in it’s easy. It’s a great partnership.

Me for and the fidelity thing is they, you both work together and both of in my, I haven’t, done much up until like last year or whatever with the, cause you just, you look at it at the end of the year and say, wow. That’s pretty good. I put in X and now I’ve got X plus, if any of you that, may be listening to this, I almost look at it like these target retirement funds that you set up for when you retire the, you look at it and depending on how old you are.

It’s more aggressive [00:09:00] when you’re getting closer to, you tell them, what age and, I’m doing that now and it’s the same thing. I just actually knowing I was going to be doing this is like the first time in a long time that, that I checked up on it. And, I could see the, my granddaughter, who’s the senior in high school.

It’s a very, in the last couple of years, it’s a very conservative. Funds that they are investing and Fidelity just does this and the ones who were in, there’s one in the other two are seventh and eighth grade and there’s a more aggressive and they were even more aggressive the younger they were.

So it just works out perfectly because, there’s ups and downs in the market. One of the things is that I ended up looking at it again, a little more detail recently, and I checked it out and I called Fidelity just to make sure I knew what I was. That I was correct on it.

And so either [00:10:00] the 16 or I can’t remember exactly when I opened the oldest grandchild up, but then I’ve earned 60 percent interest since I opened it up. And I think that’s fantastic for not doing it for not watching it at all over the years. That the interest and what I put in. If it all goes for education, it’s going to be totally tax exempt and assuming that the oldest one doesn’t use all the money that’s there, we can move it into her brother or her younger sister’s account.

Jonathan Hughes: Yes. Yeah. That’s a great feature. I’m glad you brought that up. And actually speaking of the the oldest grandchild, the one who’s getting ready. To go to college soon. I imagine that she knows that you’ve saved for her. And do you have these kind of conversations about college with her and what do you guys talk about?

Louis Rizoli: Yeah, absolutely. I haven’t gone into tremendous, details with her, but I said, you’re going to be filling out your FAFSA form and [00:11:00] she’s doing it now. With her mother and father and getting ready to do that. And, I said to her, obviously Pick your choice of where you’re going to go to college.

And even though you haven’t applied to Holy cross, I’m still going to help you while my goal in this is. That you’re going to come out of college with no debt. And whatever debt your mother and father have, that’s their problem, your mother and father are going to pay whatever they can.

And when it comes down to how much. They think you should be taken out for a loan. I don’t know if it’s going to work a hundred percent, but my goal is right now that she walked out of college without any loans.

Jonathan Hughes: And that sort of leads into my next question, which is your own. Children and your own daughter. Who’s your granddaughter’s mom, obviously. She must appreciate your saving.

Louis Rizoli: Oh, [00:12:00] absolutely. She’s constantly saying thank you. And, this is great. What you’re going to do. And wish they, I wish these plans were around, my two daughters are in their, mid to late, mid forties and now and, I wish these plans were around when they were getting ready to go to school.

It would have been a lot, a lot better because. Whatever I had saved for them when they took it out to pay the colleges, it’s taken out paying interest, excuse me, paying taxes on the interest. And so they, this is a great great plan.

Jonathan Hughes: I know that you came to us we were on one of our FAFSA webinars. And so I was just wondering if, and you mentioned it, I know that I have you here. I have to ask you what your experience as a grandparent and looking at this sort of financial aid process and interacting With MIFA has been like, but is this something that you would recommend that other parents [00:13:00] and grandparents do and take advantage of the help that’s available?

Louis Rizoli: Yeah, absolutely. And quite frankly, if anything, don’t wait till the last year that your grand child is in college, start going, excuse me, in, in high school start going. to, to these webinars that that me for office and it’s a, it’s the, I found it, the webinar on FASFA to be very informative and, quite frankly, anyone who’s watching this it’s very well done to the point that they’ll and you can, and Send in questions while it’s going on, and they’ll answer them, they go back and forth, it’s very well done, and it, it’s made for people who just act like on top of everything for the college, they go through some very elementary areas, which is very, very helpful to people who are looking to help their life. [00:14:00] Grandchildren and not in college. So it’s a day to go to college.

Jonathan Hughes: I’ve been trying to highlight this grandparents experience In saving for college for a while. So so it’s really exciting that you’re here To bring it back a little bit more to the savings aspect. Can you talk about it? You did mention it earlier, but what is your own sort of saving habit?

Louis Rizoli: Yeah I, as I’ve said before, I’m an attorney and so after I retired the, I guess they paroled me out for good behavior after 25 years as the Chief Counsel to the House of Representatives then I did some practice in the law and still do minimal now I found, when I was getting a salary every, every two weeks, it was easy at that time to just have some money taken out of my paycheck every month and put it in [00:15:00] and then, when I’m in practice, it all depended on how quickly my clients paid me.

So it was there were times that I thought I was. Going to be eligible for food stamps, and then there were other times that I thought I was going to eat caviar for the whole month. It’s, I just decided at that point, since I didn’t have a regular, a working paycheck to come in that I would just.

I would just try to go and, put money in it, their birthdays and at the end of the year. It’s whatever is easier for people, and I can’t say this, emphasize this enough, whatever works. But just do it. If your grandparents are there and you’re on a fixed income and you can’t, don’t feel like you, you have to be putting thousands of dollars or whatever it is.

It’s like anything with the I really make the analogy to, to the retirement accounts that you set up. You do it when you’re young and you go, wow, [00:16:00] that’s what’s in there now. The earlier you can do it, the The, the better that they were for your grandchildren. And that’s what it’s all set up to be.

And like I said, it doesn’t matter how little you put in, cause you would be absolutely amazed after 15, 17 years, how much that’s in there that you didn’t put in, that there was the the interest that was earned there.

Jonathan Hughes: So when we talked earlier before this, he mentioned, a change in the FAFSA over this past year or two that that is going to make a big impact as far as grandparents saving. I wonder if you could talk about that.

Louis Rizoli: So start, this is probably, especially if you have young grandchildren that you’re starting to put money aside and there’s always okay, they’re filling out the FAFSA, and I’ve, whatever the parents do, the grandparents, it’s a 529 [00:17:00] account.

And it was until school year 24 to 25, which is, this year. It was always that 529 account would be. added into their FAFSA for the amount of money that can be used for college so that it would decrease, quite frankly, what they would be getting, what the children would be getting, or grandchildren, would be getting for education.

So the change in the law, a really good one. For grandparents is that the amount of money that a grandparent has in the 529 account is now no longer added in for the on the FAFSA form. And it’s a really great thing, then you don’t have to turn around and say, oh, that was nice, the grandpa and grandma put in so [00:18:00] much money here, but now now that we’re not going to get as much from the school and, then you have to deal with the in laws.

And but, it’s the, what’s the I want to read something from that from, so it’s not just me. It’s from Kiplinger’s. Personal finance, but it’s December 2024. Monthly edition and I’ll just read one thing. The FAFSA is used to determine how much financial aid a student is eligible for and distributions from a grandparent’s own 529 account.

Could reduce that aid by 50%. That’s a significant difference. A 5, 000 reduction in aid to a 10, 000 distribution for 2024 25 academic year and beyond. However [00:19:00] distributions from grandparents owned 529 accounts aren’t considered cash gifts and won’t impact federal student age eligibility. It’s a good article if you want to read it, or that’s the most important thing there that, you’re now, whatever money you can put in there, you just don’t put it on the fast the, your children and grandchild, they don’t.

But when they’re filling out how much their income is and what the sources are, it’s a great thing and it just got better this year. And as I said, the, the keywords there and beyond so that where my granddaughter will be starting college in September of this year.

We’re filling out the FAFSA form. None of what I put into the 529 is going to count as income.

Jonathan Hughes: Really appreciate you coming on to talk about this. And thank you for doing that. Thank you for offering. Thank you for Saving frankly for your grandkids and for doing that.

[00:20:00] Good luck to your granddaughter going to school soon and good luck to your grandchildren behind her. And maybe one of them will go to Holy Cross.

Louis Rizoli: Ha! Thank you! Take care. I’m happy to have done it. I hope that anyone who watches this that I’ve been helpful. Take care.

Jonathan Hughes: All right, folks that is our show. I want to thank Louis Rizoli for offering his time. and his experience for us and for everyone. It was great to meet you, Mr. Rizoli, and best of luck with everything. And folks, if you liked what you heard on the show today and you want to hear more from us on planning, paying, and saving for college and career readiness, and meeting financial goals, then please follow the show.

And you can find us you can find us where you have found us, which is anywhere you find your podcasts. And [00:21:00] please remember to rate and review us. It just helps us to keep doing our show and to know what you want to hear about. I’d like to thank our producer, Shaun Connolly. I’d like to thank AJ Yee, Meredith Clement, Lisa Rooney, and Lauren Danz for their assistance in getting the show posted.

Once again, my name is Jonathan Hughes and this has been the MEFA Podcast. Thanks.