Providing for our children is one of our strongest natural instincts. When they’re small we want to protect them, as they grow we want to teach them valuable lessons, and as young adults, we want to provide them with the best education we can afford.
All that love and concern is priceless, but it won’t pay for college which is pricey.
Ensuring that you can send your kids to college requires a strategy. At One Financial Services, our team will analyze your financial assets as well as your current and potential future earnings to provide you with options that will help you to prioritize your goals.
These options will reflect your personal preference for how you wish to use and leverage your assets such as the equity in your home, your personal investment accounts, your retirement accounts, and cash flow from excess or additional income.
One option to consider, if there is sufficient cash flow for contributions, is to open a 529 Plan. A 529 Plan is a college savings plan that typically offers you advantageous tax breaks because earnings grow tax-free and are not even taxed when they're withdrawn. No matter how much your money grows in a 529, you will never have to pay taxes on it. Another benefit of using a 529 plan is that you, as the owner, have control of the funds.
Should your child receive a scholarship or not complete their education, you won't lose unused funds that remain in the plan. The money would remain available for post-secondary education, for another beneficiary who is a qualified family member such as younger siblings, nieces, nephews, or grandchildren, or even to continue your own education. 529 Plans may also be used for K-12 tuition in addition to college.
Should there not be sufficient assets, cash flow, or a long enough time frame to accrue all the college funding that is needed, there are many attractive educational loans available as well as financial aid from the college itself.
At One Financial Services, our clients are family. Your goals are our goals. Call One Financial Services today to see how we can help you give your children a brighter future.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.