Just like that, it’s back-to-school time. School supply wish lists have been distributed. Class schedules have been sent out. Students and teachers are preparing to return to their classrooms, and parents are looking forward to the regularity of the school year routine.
The beginning of the school year is a great time to either start thinking about education planning—or to review the plans you already have in place. Don’t know where to start? Sit down with a financial professional.
It’s important to talk through a number of issues when discussing education planning. Think about the goals you have for your child and the timeline of when those events might take place. Consider your current situation and what amount of money you have available to set aside for your child. Make a plan, but leave room for flexibility, as life circumstances often change (for better or for worse).
The simplest way to kickstart saving for your child’s education is by opening a 529 education savings plan. Some parents (or grandparents) are fortunate enough to open an account upon the birth of their child (or grandchild). But, for many others, it takes a few years before there’s expendable income that can be saved and invested. It’s never too late to start saving for your child’s education, but the sooner you start, the better.
529 plans are tax-advantaged savings plans designed to encourage saving for future education costs. They allow you to put money away for a beneficiary and use that money (tax-free) to pay for educational expenses. All 50 states and the District of Columbia sponsor at least one type of 529 plan.
According to the State Treasury of Mississippi, the average Mississippi student leaves college with $30,000 worth of debt. But, you can lessen this burden by opening a college savings plan for your child.
If you already have a 529 plan for your child or have begun saving for their future, we encourage you to sit down with your financial professional to review the plan. During this meeting, we can help you determine if you are on track to meet the increasing demands of the cost of college.
If there’s a shortfall, we can talk through how much difference it would make if you could put an extra $100 into your child’s 529 plan every month. If there’s an overage, we can help you transfer what’s left in your older child’s account to that of your younger child.
Regardless of where you are in your education planning journey, we are right here with you. Call our office and make an appointment with your financial representative to discuss planning today.
Subject to certain restrictions. By investing in a plan outside your state residence, you may lose available state tax benefits. 529 plans are subject to enrollment, maintenance, administration/management fees & expenses. Make sure you understand your state tax laws to get the most from your plan. If you make a withdrawal for any other reason, the earnings portion of the withdrawal will be subject to both states and federal income tax & a 10% federal tax penalty. As with any investment, it is important to fully consider the plan’s objectives, risks, charges and expenses before investing.