Lessons to offer at the university – Twin Cities
Whether you have a school-aged student or have grandchildren you hope to support, the rising costs of a college education can be overwhelming. We are not going to water it down. This is bad and the costs are likely to get even worse.
But financial planning is all about making the impossible possible. By applying a few simple lessons, you can make school less intimidating for you and the prospective student.
Plan well in advance
We have already said that. Money loves time. While it is true that college costs are rising, investing gives you the chance to see payoffs to offset rising costs.
But you have to plan ahead. Waiting until your child or grandchild has decided to go to school is not a great time to start thinking about how to pay for college. Take stock of what post-secondary education or training will cost now and work with your advisor to develop a plan to meet those costs.
Flexibility is the key
Keep in mind that college savings can be used for more than a four-year degree. There are a number of occupations that only require training, specialized programs or apprenticeships. Many employers are rethinking the four-year degree requirement for office jobs.
If your child is following the four-year course, work with them to identify a variety of options. Students must apply to five to ten schools. Aim for a mix of public and private schools. While tuition fees in the state are generally cheaper, some schools offer generous scholarships and aid to compete for students. An open mind can mean a lot of savings.
Consider a 529
A 529 plan is a tax-efficient investment account that allows individuals to invest in the educational future of their children or grandchildren. The 529 Savings Plan works like an IRA, allowing family members to contribute upfront to pay for tuition and other education expenses at a later date. You put after-tax money into an account, and when it comes time to make tuition, room and board, or any other eligible payment for educational purposes, the money can be withdrawn duty-free. tax.
Discuss your child’s education plans early and often. As you approach high school graduation, make it clear what you will bring before they make any firm decisions. Communicate the costs of student loans and how it will affect their financial situation. The worst thing that can happen is a bad surprise.
If you intend to support a grandchild, discuss it with your own children. They’ll know how to best use the funds you provide, and it will be ideal if everyone is on the same page.
You can do it. With the help of your advisor and the right strategy, post-secondary education may be achievable. You just need to learn a few lessons.
The opinions contained in this document are provided for informational purposes only and are not intended to provide specific advice or recommendations to an individual.
Before investing in a 529 plan, investors should determine whether the home state of the investor or designated beneficiary offers state taxes or other state benefits such as financial assistance, scholarship funds and creditor protection that are only available for investment in that state’s qualified tuition program. . Withdrawals used for qualifying expenses are tax free at the federal level. State tax treatment may vary. Please consult your tax advisor before investing.
Bruce Helmer and Peg Webb are financial advisors at Wealth Enhancement Group and co-host “Your Money” on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at [email protected] Securities offered by LPL Financial, member of FINRA / SIPC. Advisory services offered by Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.