A higher education opens the doors to lifelong personal and professional relationships. And it’s a worthy investment. Although the numbers may seem frightening, the situation isn’t hopeless. If your children are young, time is on your side. If not, don’t despair. It’s never too late to begin. Use the worksheet below to calculate how much you’ll need to save or contact us for a one-on-one session. (269) 273-3690.
- Education Savings Calculator
- Types of Education
- Coverdell Education Savings Accounts (CESAs)
- 529 Plans
- Uniform Gifts to Minors Act (UGMAs)
- Uniform Transfers to Minors Account (UTMAs)
- Life Insurance
- Additional Funding Sources
- Other Considerations
Now that you’ve determined how much you’ll need to save, you need to decide which types of investments will benefit you the most. The answer often depends on your child’s age.
- Newborn to 10 Years: Consider investments that have the potential to grow in value, such as common stocks stock mutual funds.
- 10 to 14 Years: Consider a balanced investment portfolio that consists of growth stocks or stock mutual funds, and limited maturity bonds or bond funds.
- 14 Years and Older: Consider investments that provide income and liquidity, such as income-oriented mutual funds, limited maturity bonds, and bond funds.
For help with this savings calculator please contact:
Coverdell Education Savings Accounts (CESAs), formerly known as Education IRAs, allow you to make annual non-deductible contributions designated to an investment account. The contribution limit is $2,000 annually. If any balance remains in a CESA after all expenses are paid, the account can be transferred to another eligible family member. If an account is not transferred prior to the recipient reaching age 30, the remaining funds are deemed distributed with income taxes and a 10% penalty due on the earnings.
- Money grows tax-deferred*.
- Withdrawals for up to the child’s amount of qualified education expenses for that year are exempt from federal taxes*.
- Rollovers to other eligible family members under age of 30 are permitted.
- Beneficiary must withdraw the money before age 30 unless a special needs beneficiary or assets transferred to another family member.
- Limits on contributions by upper-income tax payers*.
- May affect financial aid eligibility.
For questions or to get started with a CESA contact:
529 plans are qualified tuition programs maintained by states or eligible educational institutions that offer investors professionally managed, tax-advantaged portfolios to help meet rising college expenses through investment management firms. These plans are designed to help families save for future college costs.
There are two general types of 529 plans: prepaid tuition plans and savings plans. The states offering prepaid tuition contracts covering in-state tuition will allow you to transfer the value of your contract to private and out-of-state schools, although you may not get full value depending on the particular state. If you decide to use a savings plan, the full value of your account can be used at any accredited college or university in the country, along with some foreign institutions.
For questions or to get started with a 529 plan contact:
Before investing in a 529 plan, investors should carefully consider whether the investor's or beneficiary's home state offers any state tax or other benefits available only from that state's 529 plan.
The Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Account (UTMA) let you gift cash and other assets to minor children for tax advantages.
- Custodian manages account when child is a minor.
- Investment income typically is taxed to child*.
- No costly legal fees or reporting requirements.
- Transfer of assets is irrevocable.
- Child gains control of account when reaching majority age (usually 18 or 21).
- Assets may be considered when applying for financial aid.
For questions or to get started contact:
Cash value life insurance is another alternative for college planning. Variable Universal Life insurance (VUL)4 provides tax-deferred growth with the bonus of permanent life insurance protection. A primary purpose of life insurance is to provide for dependents at the death of a primary wage earner paying for everyday needs, the home mortgage, or education of family members.
- Owner controls money and chooses from multiple investment options.
- No pre-591/2 restrictions on withdrawals of principal.
- Tax-deferred accumulation with tax-free withdrawals*.
- Self-completing in the event of death.
- Accumulation value generally not considered an asset when applying for financial aid to meet college expenses.
- Typically 10-year minimum time horizon for withdrawals.
- Minimum funding requirements.
- Must be insurable.
- Underwriting requirements must be met.
For questions or to get started contact:
- Government Series EE and I Savings Bonds
- Home Equity Loans
- Retirement Funds
- Zero Coupon Bonds
- Federal Loans
- Roth and Traditional IRAs
- Tax-efficient Mutual Funds*
- Real Estate
- Financial Aid
- HOPE and Lifetime Learning Credits
- Student Loan Interest Deductions
- Tax credits and deductions*
For More Information
Financing a higher education for someone important to you is a challenge you don’t have to face alone.
Contact us today:
*For a comprehensive review of your personal situation, always consult with a tax or legal Advisor. Neither Cetera Investment Services, nor any of its representatives may give legal or tax advice.
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Located at: 1310 W. Broadway, Three Rivers, MI 49093. 269-273-3693
Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFGIS Insurance Agency), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Nota deposit *Not insured by any federal government agency.
This site is published for residents of the United States only.Registered Representatives of Cetera Investment Services LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Investment Services LLC site at www.ceterainvestmentservices.com.