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Education Planning

Next to saving for retirement, the biggest financial challenge is probably saving for your childs’ college education.  We are aware of our clients’ concerns:

  • How much should I save?

  • How much should I contribute each year?

  • How much will a college education cost when my child starts to attend college?

  • What if my child gets a scholarship?

  • What if my child decides to tour Europe instead of going to college?

  • Can I cash out the account and take a dream vacation?



The most popular vehicle for Education planning is a 529 savings plans. 529 savings plans offer several advantages over other savings plans:

States may allow contribution deductions from state income taxes.


Earnings are free from federal taxes if used for qualified higher education expenses.


In most states, earnings are free from state taxes if used for qualified higher education expenses.


You – rather than your child – remain in control of the funds.


Generous contribution limits exist, regardless of income level.


You choose the investment strategy that is right for you and your student.


You can contribute to a 529 savings plan and a Coverdell Education Savings Account during the same year.


Your child may choose any accredited college, university or vocational school.


The account may be transferred to another family member.


Contributions are typically excluded from your taxable estate and may not be subject to gift taxes.


Some states may provide creditor protection. It is important to review each plan and state laws to determine if they allow creditor protection.

The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that a college-funding goal will be met. In order to be federally tax-free, earnings must be used to pay for qualified higher education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10-percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits.  529 plans are subject to enrollment, maintenance, and  dministration/management fees and expenses.

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