Education Funding Approaches
The cost of a college education is at an all-time high, so planning ahead by setting up a savings plan is always a smart play, which there are multiple options available these days:
- 529 Plans
Your contributions are tax-deductible, and you’ll be able to skip taxes on earnings if you spend them on qualified education expenses. There are no income or contribution restrictions. - Coverdell Education Savings Account (ESA)
Similar to a 529 Plan. Also allows you to skip and deduct taxes as long as funds are used for qualified costs. But Coverdells are reserved for families earning less than $220,000 and you can only contribute $2,000 per student a year until they reach 18. - Roth IRAs
Contributions to a Roth IRA can be withdrawn tax- and penalty-free. Earnings can also be withdrawn before 59 and a half if used for educational expenses for a child or grandchild.
Contact Morris and Associates today for a FREE consultation to discuss the best approach to saving for one’s education and to ensure you receive the maximum benefit for contributing to an educational savings plan.