Next to saving for retirement, the biggest financial challenge is probably saving for your child’s college education. We are aware of our client’s concerns:
• How much should I save?
• How much should I contribute each year?
• How much will a college education cost when my child turns 18?
• What if my child gets a scholarship?
• What if my child decides to tour Europe instead of going to college?
• Can I cash out the account and take a dream vacation?
We empathize with these concerns and incorporate them into your overall financial plan. In Michigan, there are quite a few options you have in saving and preparing for your child’s higher education. One way we implement education planning into your financial portfolio is assisting you in setting up a college savings plan.
529 Plans have the following benefits:
• You pay no taxes on the accounts earnings.
• The child does not have control or access to the account – you do.
• If the child does not want to go to college, you can roll the account over to another family member.
• Anyone can contribute to the account.
• There are no income limitations that might make you ineligible for an account.
• If the child gets a scholarship, any unused money can be withdrawn without paying any penalty (just the tax).