College Savings Plan - Get The Safe, Financial Aid Friendly & Penalty Free!
All parents want the best for their children. They invest time into building their child’s character and integrity, instilling in them core values that will hopefully stay with them through life. Many parents believe that if they spend the time preparing their children to face the world, it will be enough to make them successful.
Unfortunately, without a good college education, many of these intuitive, gifted young people will never fully reach their potential. Business leaders today place a large and unprecedented value on having a quality education from an esteemed college or university. Twenty years ago, having a college degree may have helped you get a promotion. In today’s business environment, you need a degree just to get through the company’s front door, given the high unemployment rate.
Being able to afford that college education is difficult for all parents. According to the College Board, the annual cost of tuition at a four-year, in-state public institution for the 2011/2012 academic year is around $7,600, and one year’s tuition at a four-year private college will go as high as $30,000. These figures don’t include room and board, books, supplies, transportation, and personal expenses. If current trends remain consistent, educational costs could potentially rise by 5% to 8% annually. In the future, effective saving strategies for college are only going to become more important.
Bear in mind that all college savings plans or strategies are not created equal. The best college savings plans offer lower expenses and special tax advantages to pay for college tuition. A smart college savings plan should hide your assets and help you qualify for financial aid. Structuring a tax-efficient plan is important, and can increase the potential of accumulating more money over time (as opposed to a taxable college savings option). There aren’t many plans available that allow you to secure your child’s future in the event of your death, the death of your spouse, or a stock market collapse that affects potential investments.
Saving for your child’s college education requires a long-term commitment and sizeable monthly or annual contribution to a plan or policy. In the same manner that you save for retirement, the earlier you start your plan, the better. Use calculator to determine a sensible monthly contribution to your college savings plan. Click the “View Report” button for a detailed look at the results
The right college savings plan, structured in a tax-efficient manner and constructed during a child’s younger years, will allow for college education choices to be determined by their grades and SAT scores, as opposed to which options are most affordable, or the scholarships they receive. Following three are most viable and popular Plans are:
- 529 College Savings Plan
- Whole Life Insurance based College Savings Plan
- Bank CD or Money Market Account
The 529 plan may be viable for children up until 12 or 13 years old, because of the stock market investment component. 529 plan offers few good tax advantages that no other plan offers except one that is whole life insurance based. You would be able learn more and compare two most popular college savings options on the table below.
Savings for college through whole life insurance works best for younger children, due to the fact that life insurance policies require 10-12 years to grow in cash value. Whole life insurance based plans enjoy the advantages of “invisibility for financial aid,” so this type of plan is also suitable for high school level students. Essentially, this plan will allow you to hide some of your assets on your FAFSA application for financial aid calculation purposes. Whole life insurance based college savings plans provide almost all of the advantages 529 plans do, while also eliminating their disadvantages.
Many parents today underestimate the huge financial commitment involved in financing a college education. If your child is pursuing a degree in law, medicine, or other vocation that requires additional years of schooling, it becomes the second-largest investment in a parent’s lifetime, second only buying a home. For this reason it is vital to start planning for your child’s education when they are very young – perhaps even during pregnancy.
Request a personalized proposal for your children/child, or call (877) 972-3262 to speak with experienced college savings plan specialists now.