Education Planning

When it comes to saving for college, proper planning is essential. There's a lot to consider: how many children, or grandchildren, do you want to help; how much do you want to contribute to their education expenses; how much time do you have before they start college; do you need to fund pre-college expenses, such as a private high school; what are the chances that they won't end up going to college; is there a chance that scholarships will cover the cost; what are your cashflow needs now and what might they be when they go to college; etc.?

We help our clients think through the different variables and possible scenarios to help them come up with a plan that fits their situation and needs. This is often accomplished by utilizing one or more of these platforms:

529 Plan

A 529 college plan is a special tax-advantaged savings account you can use to cover college and private grade school expenses. The money kept in this account is free from federal income tax, and funds remain tax-free when you withdraw them for qualified education expenses.

Roth IRA

A Roth IRA is a special individual retirement account that allows you to make tax-free withdrawals to pay for higher education. This IRA account is similar to a traditional IRA, but Roth IRAs are funded by after-tax dollars and the contributions aren't tax-deductible.

Cash Value Life Insurance

Life insurance policies that build cash value could be a viable option for some people since it can be a tax-effective option that offers more flexibility if you have other financial goals and obligations and if you have any doubt that your kids will go down the college path. It doesn't affect eligibility for financial aid and is not subject to any income caps. Certain requirements must be met for this to be a feasible option, so you will want to discuss your specific situation with our financial advisors.

Custodial Accounts

Custodial accounts, such as UGMAs and UTMAs, are savings accounts that you set up for the child but have full control of until they reach legal age. You contribute to the account as you would to Roth IRA or 529 plan and an investment manager invests the money for you.

Working together, we can examine college savings options to build a customized portfolio that takes into consideration your financial goals, risk tolerance, and timeline. Contact us today to find out more.