Education Planning

Proper education planning (for yourself, children, or grandchildren) needs to occur well before mature learners or young scholars are poised to embrace higher education. Luckily, there are a number of government-encouraged educational planning tools that are available to individuals and families.

Great Advisors can help you put tax-advantaged strategies in place that are in accordance with a myriad of Federal and State laws. For instance, some contributions might not be deductible, while other education accounts are income-tested – you are only able to set them up based on income thresholds. And while some plans allow you to set up an unlimited number of accounts, not all expenditures incurred are “qualified” under every plan – the rules can differ.

529 Plans: Also called “qualified tuition plans”, these are state or educational institution-sponsored tax-advantaged savings vehicles meant to encourage individuals and families to save for the future education costs of a beneficiary (e.g. child, grandchild). Investors are not limited to the program from their home state. Some states’ plans are better than others, but the best choice may or may not be affected by where you live.

Prepaid Tuition Plans and Educational Savings Plans: Two variants of 529 Plans. While Prepaid Plans allow you to purchase credits or units towards future educational costs, Educational Savings Plans are like an investment savings account, but where funds are designated solely for future educational expenses. Both have specific guidelines and rules that are sometimes difficult to understand and follow. A good advisor will help you make sense of it all when deciding which of these are right for you and your family.

Coverdell Education Savings Accounts (Coverdell ESA): These are educational savings that can be built over time using a custodial or trust structure. The sole purpose of such an account is for paying approved educational expenses on behalf of a designated beneficiary.