| $371,466. | | | | more information. One of the best reasons to |
| That's three children attending an average-priced | | | | choose a 529 is the fact you can withdraw the |
| private school for 4.5 years each, according to | | | | savings for educational purposes tax-free. |
| the 2004-05 yearly tuition report from The | | | | IRA Withdrawals |
| College Board. | | | | If a 529 doesn't sound appealing, you can always |
| It may seem like a lot of money now. But | | | | make withdrawals, (penalty-free) from an existing |
| remember, it's the cost if your children were to | | | | IRA account for any educational costs. However, |
| attend college today. Factor in the rising cost of | | | | there are contribution and withdrawal limits and |
| private school tuition (six percent per year) and | | | | not everyone can qualify for an IRA. |
| the fact that your kids may not be going to | | | | Coverdell Accounts |
| school for another 10 years and you're faced with | | | | If you have grandparents who wish to contribute |
| the reality of a bill around $665,239 or more. | | | | to an account, you may wish to think about a |
| Unless you have that kind of cash sitting around, | | | | Coverdell Savings Account. These types of |
| (and it's probably safe to guess you don't) then | | | | accounts allow anyone with an income of less |
| it's probably wise to begin planning for your | | | | than $110,000 a year, single or $220,000, joint, to |
| children's education as soon as you possibly can. | | | | make yearly contributions of up to $2000 in an |
| The costs of public in-state tuition will naturally be | | | | account that has a variety of investment options. |
| lower than the private college figures, but on the | | | | Once the student turns 18, they have until their |
| other hand, these costs are quickly rising as well. | | | | 30th birthday to withdraw the money for |
| Providing a college education is one of the most | | | | educational use. |
| important elements of raising children. No one | | | | Creating "tax scholarships" |
| needs a reminder of how important education is in | | | | Another option for college savings includes |
| a person's life. According to The College Board, | | | | creating a "tax scholarship" for a child. A tax |
| the income-gap has recently widened between | | | | scholarship is a financial technique that creates |
| those with only a high school diploma and those | | | | money by shifting assets to your child over |
| with a bachelors degree. Currently, people with a | | | | several years and by taking advantage of their |
| college degree will make over a million dollars | | | | yearly tax capacity. These tax savings can add |
| more in their lifetime than those without. | | | | up quickly and can mean possibly thousands of |
| So what can you do to ease the burden? The | | | | dollars in extra money that can be used towards |
| single most important thing you can do is be | | | | a higher education. Ask your financial planner for |
| prepared! What was once a simple Boy Scout | | | | more information on how to take advantage of |
| motto, has quickly become an essential financial | | | | shifting assets to children. |
| planning tip. You have a lot of options when it | | | | Planning for college can be overwhelming. The |
| comes to paying for college and here are just a | | | | variety of options and plans available is enough to |
| few. Remember, it's always wise to involve your | | | | make anyone crazy. That's why it's important to |
| financial planner in the decision making process of | | | | always consult with your financial planner before |
| most major financial decisions. | | | | making any long term decisions. By teaming up |
| Scholarships, Grants and Aid | | | | with your planner, you may be able to send your |
| There are several ways to pay for college. The | | | | child to college with the confidence and knowledge |
| first and most obvious is financial aid. This can | | | | that your future, and your child's future, is |
| include loans, scholarships, grants, and work study | | | | financially secure. |
| programs. Even if your student isn't in the top | | | | You may also be able to save a great deal of |
| level of his or her class, it doesn't mean there isn't | | | | money in the process, through tax credits and |
| opportunity available for financial aid. A student | | | | other incentives. |
| can be awarded grants or scholarships based on | | | | So give it the old "college try," and schedule an |
| financial need, academic standing, extra-curricular | | | | appointment today! |
| activities, and many more. | | | | End |
| Makes sure to always fill out financial aid papers | | | | Pursuant to the Economic Growth and Tax Relief |
| to qualify, even if you believe your income is too | | | | Reconciliation Act of 2001 ("Act"), qualified |
| high to receive aid. | | | | distributions are federal income tax free. The |
| 529's | | | | provisions of the Act will expire on December 31, |
| One of the most crucial aspects of college | | | | 2010. Unless the law is extended by Congress and |
| planning is how you'll save up for it. If you're like | | | | the President, the federal tax treatment of 529 |
| most people, you've heard a lot about the | | | | plans will revert to its status prior to January 1, |
| educational savings plans known as "529's." These | | | | 2002. The underlying investments in these plans |
| plans allow you to name a beneficiary to your | | | | are municipal securities and may be subject to |
| account while you make yearly deposits. 529's | | | | market volatility and fluctuation. Please carefully |
| allow you a wide-variety of investment options | | | | consider each Plan's investment objectives, risks, |
| and it is best to consult your financial planner for | | | | charges and expenses before investing. |