2 Best Savings for College Options Buffalo – NY
A college education in recent years it has become a hobbling financial burden for many families.
Everyone knows college is expensive.
But how many parents really know how much it’s going to cost?
Not many, according to the survey.
529 College Savings Plan
One of the vehicles for multigenerational college funding is a 529 college savings plan.
In a 529 savings plan, your investments grow tax-free and can be withdrawn tax-free, as long as the money goes to tuition or other qualified higher-education costs, like books or housing.
Nearly every state sponsors its own 529s, with different investment options and, in some cases, tax breaks that supplement federal tax benefits.
Most common are state income tax deductions, although a few offer tax credits.
When setting up the account, title it in your name.
That way, colleges will count the money as a “parental asset,” meaning those dollars will lower your child’s potential financial aid by a maximum of 5.64% a year.
An account in a child’s name, by contrast, would be assessed more severely, at 20% a year.
Life Insurance as a College Savings Plan
Whole Life Insurance Requires No Qualified Expenses
529 Plans accumulate tax deferred and one can use the funds tax free if and only if the funds go towards specified qualified expenses.
Paying for expenses like: travel, computers, insurance, or housing in excess of university stated prices with 529 assets creates taxable consequences plus penalties.
Life insurance faces no limitation to “qualified expenses.”
In addition, if your child decides not to go to college a crisis does not ensue.
You can use the funds in a life insurance policy for anything, it’s easy to pivot and pay for something completely outside of realm of post-secondary education.
While life insurance as a college savings plan may not be for everyone, it’s an approach to saving that is well worth serious consideration.
It provides an array of benefits that far exceed the features found in 529 Plans.
It’s also noteworthy that life insurance can achieve a rate of return that competes favorably (or even exceeds) returns found in 529 Plans.
Mintco Financial Advisors College Planning in Buffalo NY and Tampa FL
When planning a multigenerational strategy, a fee-only financial planner who understands college aid, estate and tax laws can provide useful advice.
Planners can provide a number of strategies that mesh with a person’s estate planning, giving and portfolio objectives.
These professionals can also discuss the best time to give.
Call Mintco Financial Advisors for College Planning at
New York 716-565-1300