Financing Higher Education: College Tuition Planning and Beyond
College tuition planning is important for many families. Knowing that you will be able to provide options for your child down the road means that in...
Considering the projected costs of a college education over the next few decades, it could cost more than a million dollars for your kids or grandkids to get a degree someday. Naturally, saving for college is a top concern for parents and grandparents today. But it’s challenging to figure out which savings strategy will yield the best return and meet your family’s specific needs.
Many people assume that a 529 college savings plan is the ideal vehicle for college saving, and these plans can be a great fit for a lot of families. They’re not the only choice, though. There are some disadvantages to 529 plans that could make other college savings strategies a better fit in some circumstances. Your financial and investment advisors can help you analyze your choices and craft the ideal college savings strategy for your family.
Each state sponsors 529 college savings plans, though most 529 plans don’t have state residency requirements. For example, grandparents could open a 529 plan in Massachusetts for a child who lives in New York, and family members anywhere in the U.S. could contribute. A beneficiary may have multiple 529 plans in their name. Anyone can open and/or make contributions to a 529 account, and any U.S. resident can be the beneficiary. The beneficiary can withdraw 529 plan funds tax-free to pay for qualified educational expenses.
The only way to determine the best college savings strategy for you and your family is to consult a financial advisor you trust. Here’s a brief look at two of the most common alternatives to 529 plans.
You’re not alone when you’re making college savings plans for the children you love. Sachetta’s investment advisors can help you understand your options and create a strategy that’s both tax-advantaged for you and ideal for your family’s circumstances. Talk to us about 529 college savings plans, Roth IRAs, ESAs and college savings questions in general. We want to help you make the investment decisions now that will help the kids you love reach their greatest potential down the road. Contact us today.
Eric Sachetta, ChFC®, CFP®, is a Certified Financial Planner™ practitioner and focuses on financial planning and client relationship management. Eric believes that estate planning provides an opportunity to “look at all things that you value, see how they fit together, and make choices to balance everything and to maximize the things you want to do.”
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