Valuing People Over Profits
A college education is more important, and expensive, than it has ever been. If you want to help your children afford to attend the college or university of their choice, a college savings plan can help. Our financial advisors at The Templeton Group of Cornerstone Financial Management can assist you in understanding the benefits of college saving accounts and help you create a plan to save for your child’s education.
Financial planning is a complicated task that requires you to balance multiple priorities. A college savings plan allows you to dedicate a portion of your finances to your child’s future. Additionally, some types of college savings accounts offer unique tax advantages that can help you maximize the amount of money you are able to set aside for your children’s future.
There are a few popular options when it comes to college savings plans. It’s important to understand their various benefits and disadvantages so you can decide on an account type that may be suitable for your needs.
A 529 Plan is among the most popular options for college savings. The tax advantages are considerable when compared to regular savings accounts, contributions use after-tax dollars, and withdrawals and earnings are tax-free provided the funds are used for educational expenses.
UTMA (Uniform Transfer to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts are more flexible than 529 plans, which can viewed as either an advantage or a disadvantage. Once your child hits a certain age (either 18 or 21, depending on the plan), they gain complete control of the account and can spend the money how they wish, regardless of whether they decide to use the money toward their education or something else.
An ESA (Education Savings Account) is a unique plan with income limitations. These accounts have a $2,000 maximum limit on annual contributions (which are made after-tax) with tax-free returns. We can help you understand whether you are eligible for an ESA.
The best time to start saving for your child’s education is right now. At The Templeton Group of Cornerstone Financial Management, our financial advisors can help you understand what options you have for college savings plans, what your current financial situation looks like, and what account types may be right for you. Contact us today to schedule a consultation.
© 2024 The Templeton Group.