Planning Consideration
Whether the parents wish for the child to pay for any portion of his/her own education such as by obtaining student loans. Doing so, I believe, would allow a child to become a stakeholder in his/her education..
With the rapidly increasing tuition costs each year, early planning for college is essential.
Working with a financial planner to help evaluate all options, develop a strategy and maximize tax options* should help accomplish goals and objectives. Jonathan can help clients financially prepare to send their children to a good college or university. Starting the college planning process as early as possible usually provides the best results. Jonathan can assist parents to establish a systematic savings plan and properly prepare according to the child's age.
Saving for college education can be an intimidating undertaking for many parents who may be inexperienced with tax laws, and unsure how to balance their own financial goals, such as saving for retirement and the financial needs of their children.
Whether the parents wish for the child to pay for any portion of his/her own education such as by obtaining student loans. Doing so, I believe, would allow a child to become a stakeholder in his/her education..
What expenses are eligible with respect to each option. Some education savings vehicles can be used only for college tuition, while others can be used for books, fees, room and board, equipment, and other education-related expenses. Still other plans allow funds to be used for primary or secondary education in addition to college and university education.
Tax implications of saving and paying for a child’s education. This consideration includes review of applicable federal and state income, gift, estate, and generation skipping taxes*. Note: There may be tax deductions and credits at both the federal and state levels that are beyond the scope of this paper.
Parents with only one child, what happens to the funds allocated to an education plan if that child does not attend college.
Other financial goals, including saving for retirement and paying for life insurance protection, and the potential of dual use of allocated funds.
Timing. If the child is very young and college is far away, then the parents have time to systematically accumulate and invest money, which allows for growth of the assets. If college is right around the corner, then other options should be considered, such as taking loans or other options.
One thing in life is certain change. By regularly reviewing your college funding plan, we will help you to keep all your ducks in a row.
*Neither RANDA STRATEGIES LLC, its staff nor New York Life Insurance Company or its agents/affiliates provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
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