EDUCATION PLANNING

We can hold both 529 plans and UTMAs here in your account. This means we can keep a closer eye on these accounts, and will be able to adjust the investments more quickly to changing market conditions. We also have more control to reduce risk in the portfolio/account as the child approaches the time to withdraw funds from a 529 or UTMA account.

If you're ready to invest in a child's education, but need help figuring out which type of funding to set up, how to invest, where the tax advantages lie, or any other planning question, call us so we can make this part of your overall financial plan.

Listed below are the most common options for education savings.  This article provides a primer on the differences in various options. 

Contributions to 529 plans accumulate tax deferred, and withdrawals are tax-free at the federal level if the money is used for qualified education expenses. Because investment options can be limited, we help you determine whether a 529 or a UTMA or other vehicle might be a better funding vehicle. To learn more about how 529 plans can be used, click here. 

A custodial account allows a minor to hold investment assets in his or her own name with an adult as custodian. All contributions to the account are irrevocable gifts to your child, and assets in the account can be used to pay for college. You have complete control over the investments you hold in the account. UTMAs are often less expensive that 529s and offer a wider range of investments, and offer a degree of control until the minor comes of age. 

We can help you decide the degree of control you wish to maintain on the assets and income, model the investments, the timing of liquidating them, and how taxes on UTMAs work.

A Coverdell education savings account (ESA) is a tax-advantaged education savings vehicle that lets you contribute up to $2,000 per year. Contributions grow tax deferred, and earnings are tax-free at the federal level if the money is used for qualified education expenses. 

We can walk you through various investment and income scenarios so you can make an informed decision on whether or not this is the savings vehicle for you and your loved one. 

You may choose to simply save in your own name. This means you maintain complete control and pay income and capital gains tax on the earnings. Though technically not a college savings option, some parents use Roth IRAs to save and pay for college. 

If this simple set-up fits your timing or comfort level, let us help you decide contributions and look at impact upon withdrawal.