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Education planning is the process of creating a realistic strategy for funding your children’s higher education costs. It is essential to develop a plan that works in conjunction with your comprehensive financial plan. The following is a list of items to consider when creating your education plan.
Most people start with a goal of funding their children’s entire education; however, this is not always possible given the specific situation of each family. Choose a realistic amount and be flexible enough to change that goal as the situation warrants. It is essential not to commit too much money to education planning at the expense of under-funding other priorities like retirement planning.
There are multiple types of accounts for college savings. Some offer significant tax benefits but higher expenses; some offer lower fees but more taxes. Certain accounts may be more advantageous if applying for financial aid for children. While the most critical action you can do is save money, it is vital to use the type of account most beneficial to you.
While the amount you save is most important when creating a plan, the proper allocation is often overlooked. You don’t have as much time to save for college as you do to save for retirement. That is why it is essential to use an allocation appropriate for shorter time frames. While you can be aggressive with the allocation for young children, a more moderate allocation is generally warranted for teenagers. It is critical to review the allocation every few years and make changes when appropriate.
It’s never too late to start saving for your child’s college education.
Higher education provides your children with lifelong advantages.
Please call us at (800) 925-2050 or Schedule an Appointment with us today to discuss your situation.
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