Educational Planning
Planning for your children's future can be one of the most important decisions you will ever make. The time to start saving and planning is now since the longer you wait the more you have to invest. College tuition is a large expense and will only rise with time. And if you have several children the cost increases even more. This financial challenge is shared amongst most parents especially during these tough economic times.
Are you worried about paying for your children’s’ education? Contact a local educational planning professional today for assistance.
American families with a need to save for college expenses have more options than ever before. More traditional investment options include savings bonds, investment accounts, annuities, and savings accounts. Newer investment options including Section 529 college savings plans, Coverdell education savings accounts, and IRA Accounts. The newer investment options are great opportunities, but they vary by state. Also, the investment option chosen should match the individual's financial situation as well as how many years they have left to save.
A local financial planner in your state can help you determine the best option for you and also help clarify some of the following issues associated with educational planning:
- Differs by State
- Increasing Tuition Costs
- Education Tax Exclusion
- 529 Plan
- IRA Plans
- Wills and Trusts
According to Publication 970, Tax Benefits for Higher Education, from the IRS, there are Federal tax incentives for families saving and paying for college education. Some of these include deductions for tuition and fees, deductions for interest paid on student loans, the American Opportunity Tax Credit, the Lifetime Learning Credit, Tax Free Scholarships, and Tax Free Education Assistance from employers under a Section 127 educational assistance plan. When considering creating Wills and Trusts in educational planning, many are concerned about the tax implications of estate planning as a college savings choice. It is important to contact an expert in your state who can help minimize any future tax implications.