If you have dreams of sending your children to college, now is the time to start saving. While it may seem far off, professional financial planners consistently agree that it’s never too early to start saving. Weaver Insurance & Financial Advisors provides Waynesboro, VA, residents with a variety of financial and investment planning services, including helping parents research and set up college savings plans that best suit their lifestyles.
Here are a few of the best college saving strategies financial planners recommend:
- 529 Plan: 529 plans provide two ways to build up a college fund. The first option is to create a savings account that invests in mutual funds, which can then be used to pay for educational expenses tax-free. The second option is a prepaid tuition plan for a participating school, which will ensure the rate is locked in and eliminate worry about tuition pricing inflation.
- Roth IRA: Roth IRAs are typically used for retirement planning but can be utilized as a saving technique for educational expenses as well. After-tax contributions will continue to increase tax-free, and withdrawals that are made to pay for college will not be subject to any penalties. There are a wide variety of investments to choose from with Roth IRAs.
- Coverdell Education Savings Account: Education savings accounts have similarities to both 529 plans and Roth IRAs, but they come with a few more restrictions in regards to income and contributions. However, this is an attractive savings strategy for many because of the flexibility to use it for any educational expense throughout a child’s life.
The pursuit of higher education shouldn’t leave your child struggling with mounds of student debt. Speak with your financial planner about which college savings method is right for you and your family now. Call Weaver Insurance & Financial Advisors at (540) 943-1221 to learn more about their history and their full range of investment options.
Filed Under: Financial Services