Saving For Your Child's Education
Graduation season has many of us thinking about how we can best prepare our kids for their future. With nearly 70% of high school students attending college right after graduation, saving for your child’s education is a great first step and there is a vast selection of college savings accounts out there!
Despite the cost of rising tuition, obtaining a college degree is still a major achievement in the modern world. However, less than half of parents are actively saving for their child’s education. Whether you want to begin saving when they’re toddlers, teenagers or young adults, National Exchange Bank Investment Management can help parents put away those pretty pennies by offering services to establish and maintain a 529 college savings account. 529 plans are beneficial for a variety of reasons, including:
- You pay no federal taxes on the account’s earnings. Paying taxes can be extremely stressful, especially on money that you earned with hard work and strategic saving. This perk allows you to invest those tax-free dollars into the account.
- The child doesn’t have control of or access to the account. The parent is the only person who is able to update, change or control a 529 account, which promises that the money will be used for your child’s education and not their ice cream addiction or road trips to see their friends.
- If the child doesn’t want to go to college, then you can roll over the account to another family member. College isn’t for everyone and, if the child you originally intended for this account to help doesn’t want to further their education past high school, then you can switch the account to benefit another child or family member.
- Anyone can contribute to the account. Whether it’s Aunt Betsy or Grandpa Jim, anyone is able to deposit money into a 529 savings account. So, rather than giving a $50 gift card for your child’s birthday, your friends and family can donate directly to the college savings account to ensure the money isn’t spent on anything but their future education.
- There are no income limitations that could make you ineligible for an account. With a 529 account, the class status of your family’s income does not negatively impact the ability to obtain an account.
- Most states don’t have an age limit for when the money has to be used. Thankfully, the money accumulated in this type of account can be used whether your child enters college directly after high school or takes a few years to dabble their feet in the professional, working world first.
With keeping the above tips in mind and understanding the various saving accounts for college students that are out there, like a 529 college savings plan, you’ll get through the college roller coaster in no time! Give us a call when you’re ready to begin saving for your child’s financial future.
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