College Planning
What Will it Take to Deliver the Dream?
Exploring the Various Ways of Funding a College Education
Before your child was even born, you were planning. What will we name him? What color should we paint her room? What is the best childcare alternative?
But with all the demands and decisions that new parents face, one important aspect is often unintentionally overlooked in those early stages – college. However, with tuition rates rising, it should be at the top of every parent’s planning list ... no matter what the child’s age.
What’s more, saving for a child’s education doesn’t necessarily have to rest entirely with parents. With the flexibility and convenience of today’s savings plans, many alternatives make good sense for grandparents, aunts and uncles, other family members and friends.
You have big dreams for the child in your life. Don’t let a lack of planning sidetrack those aspirations. As Raymond James financial advisors, we’re here to assist. Our knowledge and professional guidance can help you give your child the opportunity for the bright future he or she deserves.
Start Planning Today
Although it is best to start the college investment process when your child is young, it is never too late to begin. No matter your child’s age, what’s important is that you plan now. It is easy to put off thinking about these expenses, hoping that your child will receive scholarships or financial aid. But don’t count on them. While these awards do help with college funding, they are not guaranteed, not always comprehensive and not available to everyone.
Service That Extends Beyond Financial Planning
Confidentiality is a top priority in our client relationships. We appreciate the trust our clients place in us and never take that trust for granted. Naturally, any business we conduct is held in strict confidence – just as you would expect from your physician, attorney or any other professional.
We provide objective information and unbiased guidance.
Because we are not required to sell specific products, we have the freedom to help you select the investments that are right for you.
Sound investment decisions are based on facts and careful research, not emotions. However, we know it’s not always easy to make sensible choices, especially in a fluctuating market. We can help you employ disciplined, long-term strategies that help hedge against short-term market swings. Together, we’ll establish reasonable investment goals – and stick to them.
Investing
For a Younger Child’s Education
If your child is young, then time is on your side. Because you’ll have plenty of time, you may be able to invest less money now and, thanks to the potential impact of compounding returns, let your savings do much of the work for you.
For an Older Child’s Education
Don’t panic if your child is already in high school. While you may need to invest more money in a shorter time frame, you should still be able to afford at least a portion of college costs.
Take a close look at options without specific contribution limits, as they may be more appropriate for you now. Also, talk to your child about specific goals. What schools is he or she interested in? Is college an option or does your child have his or her sights set on a vocational school? Some plans limit the beneficiary’s choices, so it is important to understand your child’s expectations.
Which Plan is Right for You?
With many new college savings alternatives available, it is critical to choose the one that’s appropriate for you. Selecting the wrong plan – or not investing properly within the right one – can prohibit you from maximizing your savings. However, with the help of our experienced guidance, we can help make choosing the right alternative easier.
What to Consider Before Selecting A Plan:
What are the tax benefits?
Who controls the funds?
How much risk is involved?
Are there contribution limits that may hinder your ability to meet savings goals?
Are large contributions subject to gift taxes?
What investment options are available?
Click on any of the alternatives to learn more about these different savings account features.
529 Savings Plans*
These state-sponsored plans offer flexible, tax-deferred ways to save.
529 Prepaid Plans
These plans allow you to purchase a certain percentage of tuition over time that is guaranteed to be equivalent to the same percentage of tuition in the future. Raymond James does not offer 529 prepaid plans. However, we can assist you in determining if a 529 prepaid plan is available in your state.
UGMA/UTMA Custodial Accounts (Uniform Gifts/Transfers to Minors Act)
This act allows you to transfer ownership of assets to your child without needing to establish a more costly trust.
Coverdell Education Savings Accounts
Formerly known as the “Education IRA,” this savings alternative is a trust or custodial account used for education expenses. Raymond James does not offer Coverdell Education Savings Accounts as a custodian. However, we are contracted to offer these accounts through certain mutual fund companies.
Other Ways to Save
While 529 plans and Coverdells are specifically designed for higher education planning, other strategies also exist. While not intended specifically for this purpose, these alternatives can help you pay for expenses. Talk to us before implementing any of these strategies to find out how they may affect your overall investment plan.
Investors should carefully consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. This and other information about 529 plans is available in the issuer's official statement and should be read carefully before investing. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. Investors should consult a tax advisor about any state tax consequences.
As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover education costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state.
