College Planning

Paying for college is one of the biggest investments you may undertake for your children’s future. Too often, families fail to financially plan for college with enough time and sometimes end up taking on more debt than they can afford. 

College planning is one of the most common financial concerns among Americans. While the definition of it is simply how you’ll plan to pay for college, there is plenty more that goes into it. To properly plan for affording your education or that of your loved ones, the process must begin by identifying your education needs (for yourself, your family, or others you’re looking to help) in order to determine the most effective way to meet those needs.

Paying for College Blog Series

Your Guide to College Planning:

College planning is one of the most common financial concerns among Americans. While the definition of it is simply how you’ll plan to pay for college, there is plenty more that goes into it.

The Basics of Saving For College

The Basics of Saving For College

Federal loan program limits impede students from borrowing the entirety of their university’s cost, so many parents end up going deeper into debt to pay tuition fees, which ends up derailing their own long term financial goals and even their retirement! That’s why it’s important to start financially planning for college as early as you can. 

Tuition simply isn’t what it used to be. Skyrocketing tuitions mean you need to get a headstart on planning and saving for college. Consider your child’s higher education one of your financial priorities once you’re appropriately managing your retirement savings and emergency fund savings.

Look to establish a tax-advantaged education savings plan. With a cohesive financial plan, you can incorporate an education savings plan into your monthly budget and plan. Additionally, grandparents, aunts, uncles, and friends can contribute to the college savings plan.

With a 529 plan, your contributions are tax-deductible, so as long as you spend them on qualified educational expenses, you will not be taxed. While they vary by state, they have no income or contribution restrictions, making saving all that much easier. 

Coverdell ESAs are similar to 529s. As long as you are using the funds for education-related expenses, you can skip taxes. Note that ESAs have stronger limits than 529s, namely that only for families that earn under $220,000 can contribute to these kinds of accounts. Additionally, the max annual contribution is $2,000 per child until they turn 18. 

Did you know you can lock in tuition in advance? While not all states and universities offer prepaid plans, it can be handy to pay ahead of your student actually attending college. That said, it’s important to consider your child may not want to go to the university or be admitted. Conditions for those prepaid funds vary by university. 

A custodial account, such as a Roth IRA, are options when financially planning for college. These contributions can typically be withdrawn without tax or other penalties, thus providing more flexibility. Discuss this option with your fiduciary financial advisor to evaluate if it’s the best option for your family’s college savings plan.

How Much Have You Saved For College?

How Much Have You Saved For College?

Discover if you’re on the right track.

Do We Need College-Focused Financial Planning?

The right qualified wealth planner has your best interest in mind. They are focused on how college planning works with you and your family to ensure your financial decisions are active steps towards your long-term goals. 

A holistic financial plan designed for each of life’s important moments means you can spend time enjoying them – instead of worrying about achieving your financial dreams. A great financial plan enables you to see your investment in your child’s (or your own) education as just one aspect of your entire financial life, rather than the end-all-be-all of your finances.

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A Wealth Planner With Expertise in College Planning

The top 5% of advisors in the nation. 

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Experienced

Nationwide

| Advisors Nationwide |

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