Easing the Financial Burden Advice from CPAs Easing the Financial Burden How youre going to pay for childrens college education The numbers can be overwhelming It wont be easy ID: 272268
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College Planning:
Easing the
Financial Burden
Advice from CPAsSlide2
Easing the Financial Burden
How you’re going to pay for children’s college education?
The numbers can be overwhelmingIt won’t be easy
It will take planning, research and belt tightening
It might even take debtSlide3
Easing the Financial Burden
Funds for paying for a child’s college
education will usually comprise three sources:SavingsFinancial aid
Tax relief
You should not save for college at the
expense of your own retirement savingsSlide4
Easing the Financial Burden
It pays to start early
Take advantage of the power of compoundingThe earlier you start the more interest
you will earn and the more you will saveSlide5
Easing the Financial Burden
Consider how to allocate your assets
Stock MarketShort-term bond fundsMoney Market fund
You want to know the money is available
when you need itSlide6
Easing the Financial Burden
Valuable tax breaks to consider
while saving for college: 529 Savings Plan/Qualified Tuition ProgramPrepaid Tuition Plan
Coverdell Education Savings Account
Uniform Gift to Minors Act
Savings BondsSlide7
Easing the Financial Burden
State-sponsored 529 Savings Plan,
also known as a Qualified Tuition ProgramEarnings and distributions are tax freeNo income limits on contributions
Investment minimums are low
One child can be beneficiary of more
than one account
Assets managed by a professional financial
services firmSlide8
Easing the Financial Burden
Prepaid Tuition Plan
Pay future tuition at a state college at today’s lower ratesSlide9
Easing the Financial Burden
Coverdell Education Savings Account
Save for college the same way to save for your retirementSlide10
Easing the Financial Burden
Uniform Gift to Minors Act
Unlimited investment optionsParental control over assetsMay be subject to “kiddie tax”
Savings Bonds
Series EE and I bondsSlide11
Easing the Financial Burden
Nest Egg Falling Short?
Use of financial aidLoansTax credits and deductionsSlide12
Easing the Financial Burden
A few more options…
Advanced Placement classesCommunity CollegePostpone for a year
VolunteerSlide13
Easing the Financial Burden
Useful Tips…
Involve your child in the financial planning processEncourage frugality
Begin saving as soon as possible
Encourage your child to be an achiever
Make a joint effort