As a parent, it’s never too early to begin planning your child’s education. It can be a confusing process, and you may not know where to begin. If you are ready to talk to an education planning professional, we are here to help. At INSERT NAME HERE, we have been helping proud parents plan their children’s future for many years, and we are determined to help every client we work with find the best options for their child’s future.
Your child’s education may be one of the largest financial investments you make, but what’s more valuable than your child’s future? Having a post-secondary education is one of the keys to your child starting a successful career and setting them up for financial success as they mature into an adult. The era of a high school diploma assuring a young person job security is over; so, it is essential to plan accordingly. Many people underestimate the cost of college, and they do not plan adequately. Inflation and rising tuition costs continue to compound the problem. Even if your child does not choose to attend a traditional four-year university, you still have to consider the cost of a skill-based certification.
The good news is that a strategic investment plan can combat inflation and rising education costs. Preparing in advance for your child’s future can help college be a milestone to celebrate instead of a financial burden for your family.
What Are The Different Types of Education Planning?
When it comes to saving for your child’s education, there are many options available, and each type of investment has various advantages, depending on your family’s situation.
Saving Plan Trusts, specifically 529 Plans, are extremely common. They are usually the type of plan one thinks of when considering a college investment account. This type of account can be opened with as little as $25, and gifts can be the same amount. Since contributions are considered gifts, they are tax deductible as long as they are $10,000 a year or less. Money withdrawn from the account and used for educational expenses is nontaxable. However, if more than $10,000 per year is gifted, there will be a gift tax of up to 50 percent. You may also pay taxes or fees if money is withdrawn early or is not used for educational expenses.
If you are looking to diversify your educational assets, an Education IRA may be what you are looking for. This type of IRA allows you to invest $2,000 per year for each child. Unlike 529 Plans, the investments are not tax deductible. However, you can withdrawal the money tax-free if it is used for educational expenses.
Bank Certificates of Deposits, CDS, and bank saving accounts are other options to consider when saving for college. These methods are usually FDIC insured, therefore, making them more reliable options for those worried about losses. A disadvantage of CDs and bank saving accounts is they have a lower return than other investment opportunities. They are the best option for short-term savings goals.
How Do I Get Started?
The first step when investing in educational planning is to speak to our team of experts. We have specialists who focus on educational planning and have an in-depth knowledge of all of the options that are available to you. Our experts will work with you to design a personal investment plan to help you achieve your financial goals.
It is also important to start planning early for the financial responsibility of higher education. The sooner that you start putting your money to work for you, the greater your returns will be, and the easier it will be to handle the financial burden. Investing just two years later can affect your returns by a few thousand dollars, requiring you to invest significantly more money to achieve the amount needed for tuition.
You’ve come to the right place to get help with saving for your child’s educational future. We work with you every step of the way to make sure that you are in a position to give your child the education that they deserve. We know how important your children’s future is to you, and we work hard to show you that it’s equally important to us.
Our friendly team of experts are waiting to talk to you and guide you through this important process. Give us a call today, the quicker you get started, the quicker you will benefit from the power of compound interest.