Supporting a child’s education can be one of the most rewarding aspects of success and one of the most important elements in your financial plan. With rising inflation and the high cost of education, planning to contribute to another’s higher education may require an early start.
There are a variety of investment vehicles and tax-efficient options to contribute to the cost of higher education. As your trusted partner, our knowledge and professional guidance can help you analyze the tax benefits, ownership structure, risk and contribution limits involved – even what to do with your leftover education funds if your aspiring academic earns a scholarship.
When you invest in potential, you’ll do more than help make the dream of education possible for a student in your life. You could provide the inspiration for a legacy of higher learning that’s passed on for generations to come. What’s more, the funds you contribute have the ability to grow tax-deferred, and eventually be withdrawn, tax-free.*
Working together, we choose the investment strategy that is right for you and your student, keeping in mind that generous contribution limits do exist, regardless of income level.
*Certain conditions may apply. Rules and laws governing 529 plans are varied and subject to change. As with other invetments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perfome well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Tax-free withdrawals may be made for qualified education expenses. Otherwise, the deferred earnings portion may be subject to taxes and a 10% penalty. Please consult a qualified tax professional discuss tax matters. Investors should consider before investing, whether the investor’s or the designated beneficiary’s home state offers state tax or other benefits only available for investments in such state’s 529 savings plan. Such benefits include financial aid, scholarship funds, and protection from creditors. 529 plans offered outside their resident state may not provide the same tax benefits as those offered within their state. The tax implications can vary significantly from state to state.
Although UGMA and UTMA accounts are not designed specifically for college savings, they offer advantages including multiple investment options, limited tax benefits and the ability for a parent to transfer assets to a child without needing to establish a more costly trust. However, contributions to the accounts are irrevocable and parents lose control of the funds when the child becomes 18 – 21 – an age that may vary by state. We help you navigate these considerations, providing solutions tailored to your funding needs.
“Giving the gift of greater opportunity by supporting a child’s education can be one of the most rewarding aspects of success and one of the most important elements in your financial plan.”