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Education Funding

PLANNING AHEAD:

College education cost has been on a steady rise for a while now. Some statistics show that the growth rate of college cost twice outpaces the rate of inflation. Small wonder why a major concern for most parents today is how to meet this future obligation when the time comes. One way to gain a snapshot of what to expect is to utilize the FINANCIAL CALCULATORS provided in this portal to measure cost.

There are several savings vehicles that could be utilized to fund college education. The simpliest way would be to have sufficient money in your bank account - unfortunately not everyone is that lucky. Some parents are known to have purchased savings bonds or investment real estates as funding vehicles. While most home owners could ultimately tap the equity on their homes to pay for college, there might still be other more sensible ways, as long as you realise it early enough.
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GREATEST GIFT OF ALL:

Wouldn't it be nice to have a special college investment account to meet this crucial obligation? that could be the greatest legacy you would pass on to your offsprings or future generation. Which is where the Education Account comes in. Such accounts could be in form of:

  • Education IRA (Coverdell Plan).
  • Unified Gift/Transfer To Minors Act (UGMA/UTMA).
  • 529 College Account.

    These accounts all have their distinguishing characteristics and tax ramifications, but the key goal is to stash away enough money and to let it grow long enough that parents don't have to bear undue burden when the time comes.

    Over the last few years, there has been a surge in the popularity of 529 College Plans, due to its advantages vis-a-vis other programs out there.
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    529 PLAN SNAPSHOT:

  • Anyone can participate in the plan, no matter his or her income or state of residence.

  • The Account can be maintained in the name of the custodian who directs how the funds should be utilized.

  • Earnings grow Federal income tax FREE when funds are used for qualified higher education expenses*.

  • Assets can be transferred from one child to another and used at most accredited institution of higher learning in the US for qualified college expenses – tuition, room, board, and books/supplies.

  • Contribution limits are generally quite high.

  • Anyone can set up and contribute to a 529 Education Plan.

    The College Savings Plans Network serves as a clearinghouse for information among existing college savings programs. To learn more about them click on College Savings.

    What will it take to save for a college education?

    To request additional information about college funding programs e-mail us or complete the Service Enquiry Form.

    *Unless extended, the provisions relating to tax-free withdrawal would expire on December 31, 2010 and the provision, which taxes the earnings portion of qualified distributions, will apply.
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