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All posts tagged 529 plan

Is your child hurtling toward college but you haven’t given more than a few anxious thoughts to how you’re going to pay for it? School is drawing closer and tuition projections seem to grow more outlandish by the year. Avoiding the issue won’t make it go away, and the sooner you tackle it, the better off you are. Read on for some tips.

Resist the urge to stand still: If you haven’t done anything yet, you think, why start now? Well, with compounding, a dollar saved today is much more valuable than a dollar saved 10 years from now. And even if you manage to save only a small amount between now and the time your child is ready for college, he or she is going to have to borrow that much less for tuition. The key is taking that first step. Read more

Written by: Jeremy Shafer

It’s that time of year again! Retail outlets load up on pencils and paper, backpacks, and every school supply under the sun.

It’s also a time to revisit a popular financial planning tool – college savings accounts.  With college costs climbing at an average annual rate of 6%, many parents and grandparents are asking what they can do now to prepare.  Here’s a quick primer.

What types of accounts are available?

There are a number of accounts that can be used to fund college expenses, including:

  • 529 College Savings Plan
  • 529 Prepaid Tuition Plan
  • Coverdell Education Savings Account
  • Roth IRA
  • Savings/Investments

Each type of account has benefits and drawbacks, so it’s important to determine which account would best fit your needs before committing to a plan.

What considerations should I take into account?

To help narrow your choices, consider your answer to these questions:

  • How many children will I be assisting with college expenses?
  • In how many years will the money be used for college?
  • What is the current cost at the type of college I’m considering (2-year public, 4-year public, 4-year private)?
  • How much of the total bill do I want to help with?
  • Is saving for retirement more important than saving for college?

With these answers in hand, you can take your search to the next level.  Consider discussing these questions with your tax/investment advisor:

  • How do I balance retirement and college savings?
  • What are the tax implications of the various plans?
  • How will financial aid applications be affected by my plan choice?
  • What option would best fit my needs?

If you’re looking to get started, or if you have an existing plan that you’d like to review, call or email today.

p.s. Did you know that one of the three plans offered by the state of Michigan ranks in the top 5 nationwide?

A recent article from covers this topic.  Many peoplewonder what is the best way to give financial gifts or teach their children or grandchildren the right way of investing and saving.  Whether you are looking to teach them how to invest or save or you are wanting to assist them with college costs, there are many choices out there.  RFM Financial Solutions can also help assist you in financial gifts to minors as well as educate you on the best option for you and your family situation.

Click here to read the article by Christine Benz