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Education Funding

Education funding is important to many of our clients.  While many of our clients have already helped their children through the college years, many have grandchildren, or even great grandchildren they want to help.  We guide clients to identify the strategies and timing of support to make best use of the available resources, including Free Application for Federal Student Aid (FAFSA).  We use tax free growth 529 Plans, select investments within them to fit the timing and needs of the student, and help make distributions from it at the appropriate times. 

Many of our clients have children or grandchildren they want to ensure get a successful start after school.  As an additional, no charge, service we meet with our client’s family and educate them on how to navigate their financial lives while entering the work force.  We believe this is a crucial time in a person’s life, and it is much easier to start your financial life with good habits, than it is to break bad habits.

Frequently Asked Question About Education Funding

  • What is a 529?
    • A 529 plan is a type of investment account that has tax advantages when the proceeds are used to pay for qualified education expenses. In order to be qualified it must be used for a beneficiary, however the owner may change the beneficiary to most family members, including the beneficiary’s spouse, children, parents, aunts/uncles and cousins.

Disclosure: At this time, the tax law allows participants in 529 plans to make tax-free withdrawals of account earnings to pay for qualified educational expenses until December 31, 2010. After 2010, distributions may be taxed at the beneficiary’s tax rate unless there is further legislation to extend or change the tax law.

Withdrawals for non-qualified educational expenses are subject to a 10% IRS tax penalty and are taxed as ordinary income. Tax-free withdrawals must be used for qualified educational expenses and that such withdrawal may be subject to income taxes, depending upon the participant’s state of residence Units of the 529 plan investment options are municipal securities and may be subject to market value fluctuation. Before investing in a state specific 529 plan, you should compare your own state's qualified tuition program and any state tax or other advantages it may provide.

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