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With the rising cost of education and the necessity of a degree for a meaningful career, it makes sense to prepare financially to help your kids go to college. Otherwise, having student loans will make it more difficult for your children to become self-sufficient. Fortunately, we can help you set up a college savings plan that prepares your kids for college using tax-free investments.
With a qualified college savings, you can grow a sizable nest egg for your child’s education inside of a tax-advantaged account. You can spend the money on qualifying educational expenses, starting from kindergarten all the way through graduate school. It can even pay for apprenticeship programs.
A college education is an important asset that can open the door to amazing jobs and opportunities. Unfortunately, a college degree can cost tens or even hundreds of thousands of dollars, depending on the school and the degree program you attend.
It’s important to plan ahead and include college in your financial planning, just like you would with any other big expenses. Saving for college can even help your finances, because it can reduce your taxable income.
A college savings plan, such as a 529 plan, is a plan originally designed for higher education. With most recent changes in legislation, the 529 plans are more flexible. You can use the funds in your 529 plan for education in grades K–12 besides graduate schools. If your child doesn’t go to college, you can even use the money to pay for an apprenticeship program instead.
The biggest advantage of a college savings plan is that your savings grow tax-deferred, and any withdrawals used for qualified educational expenses are tax free. Some plans allow you to prepay tuition for future attendance at a designated secondary school, letting you lock in current rates and a lower cost of tuition.
A 529 plan is a college savings plan designed to cover educational expenses from kindergarten through graduate school. Your savings grow on a tax-deferred basis. Any withdrawals for qualified educational expenses are tax free.
It depends on your financial situation and your overall financial plan. If you haven’t prioritized retirement savings, you may need to start there. Otherwise, you can start saving as soon as you have children, because you can use a college savings plan for educational expenses as early as kindergarten.
To save for college, we recommend sitting down with one of our financial advisors to go over your current situation and your future goals. A 529 plan may be the right option for you, but we also want to ensure you’re meeting your other financial goals, such as saving for retirement.
We’re here to help you save for college, taking advantage of tax breaks and current tuition rates to fund your child’s future education. We’ll sit down with you and discuss your options to help you make the best decision. Call us today and start planning for college.