Saving For College
It is never too early to start saving for college, especially if you want your children to graduate with as little debt as possible. Educate yourself by learning how you can start setting aside funds now for your child’s college expenses, using a variety of different options including, but not limited to 529 savings plans. 529 Plans
529 Plans
These state-sponsored investment accounts allow your money to grow tax-free, and can be withdrawn without being taxed when used to pay for qualified educational expenses.
Coverdell ESA
This plan allows you to contribute up to $2,000 a year, tax-deferred, with tax-free distributions for college educational expenses.
UGMA/UTMA
You can arrange custodial accounts in your child’s name that may be taxed at your child’s lower income rate rather than your higher tax rate. These funds may be used for college once your child turns 18.
Savings Bonds
Any bonds that you’ve purchased after 1989 can be redeemed tax-free when you use these funds to pay for your children’s college expenses.
IRAs
Although many experts recommend avoiding using IRAs for college, early withdrawal penalties are waived when you use your traditional IRA/Roth to pay for your children’s college expenses.
College Savings Advice
It is less expensive to save for higher education than it is to borrow, which is why these money-saving tips should help you in your quest to lower the costs of college expenses.
Savings Calculator
Trying to estimate the cost of your child’s college education can be a confusing and intimidating process. Using the Savings Calculator will allow you to get an approximate figure that can be determined with very little effort on your part.
Tax Benefits
Although higher education can be a costly expenditure, it can also provide you with tax benefits as well. Explore the many different tax saving incentives that can be an important part of paying for your child’s education.
NextStudentAdvisor does not offer tax, legal or investment advice. Consult with experts in these fields before committing any money.
Financial, Tax and Legal Disclosures
NextStudent does not offer tax, legal or investment advice. Nothing contained herein is intended to serve as tax, legal or investment advice. We urge you to consult with experts in these fields before taking any action based on the information contained on our site.