Education Planning
Planning for a child's education used to be a relatively simple matter. You just socked away some money into a savings account and let it be until it was time to withdraw.There are now several different types of education savings plans that have tax benefits. The two most common are the state 529 plan and the Coverdell Education Savings Account (Educational IRA). While it may seem as simple as just choosing one of those two and then saving money into them, there are many other things to consider.
At Black Swan Financial we like to look at your education savings plan as a part of your entire financial plan. This means making sure you are saving enough for things like retirement or future health care needs in addition to education savings.
Some of the things you need to consider when thinking about educational savings are:
- Have I saved enough to meet retirement goals? (It may be better to consider potential financial aid for your children than to burden them in the future if you, personally, do not have enough to live on)
- How does an education savings plan affect my child's ability to obtain financial aid?
- What types of schools do I want my child to attend? Public/Private? (has bearing on amount to save)
- Does my child attend private k-12 schools? (there are plans more beneficial for this)
- How much will college cost in the future? (the education inflation rate is presently much higher than the general inflation rate)
- Which plan is right for my situation? (the different plans have very different structures and limitations)
- If I choose a 529 plan, which state plan is right for me? (did you know you can open a 529 plan in any state no matter where you reside?)
Please contact us today if you have any questions about education savings plans.
