The Child in Mind & Your Bank Account
8/26/2020
Every year seems to go by faster than the one before, this year even with a pandemic, has been no exception. For me it seems like the students no more than just got out of school and now summer is over, and everyone is heading back. My daughters are going into 3rd and 1st grade and they are really looking forward to going back to see their friends. Their younger brother will get to sit out one more year before preschool.
Looking ahead it seems that in nine years my oldest will be able to start college. Yes, that might be a long way ahead, but in a blink of an eye that day will be here. Besides emotions that will trigger (especially for her mother) we have been trying to plan for the financial trigger that will come with the ever-increasing cost of tuition, room, and board.
The thought of a tuition can cause stress on you and your bank account. There are plenty of different ways that a family can save for their child or grandchild’s education, one of the most popular ways is through 529 plans. 529s allow the owner to save for the beneficiary by using the potential for tax free growth to pay for tuition or room or board. The 529 plan can be used for any level of higher learning including trade schools and private school (college or prior). The other advantage of them, is that they can be set up so the parent or even the grandparent can be the owner and child can be the beneficiary. This can be an advantage when it comes to fill out forms for financial aid or if you want to change the beneficiary to a sibling.
While your kids are heading back to school, now is a good time to sit down and find out if you are saving enough for the possible future education need.
As always if our practice can help with that process any way, please let us know.
Tyler Williams
Financial Advisor
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.