3 Critical Considerations For How To Save For Your Child’s (or Grandchild's) College Education—Part 2

Last week, in part one of this series, we discussed 529 plans and education savings accounts, which are both popular options for saving for a college education. One of the main reasons for their popularity is their tax-saving advantages. The money you contribute to a 529 account grows on a tax-deferred basis, and withdrawals are tax-free, provided they are used for qualified education expenses, such as tuition, room and board, and other education-related fees.

That said, one of the downsides of 529 plans is that they come with strict limits on how you can use the funds (for education-related expenses only), and they also have a limited range of options for how you can invest your funds, primarily in various mutual funds. For these reasons, 529 plans and ESAs aren’t always the best fit for some families looking to save for their loved one's education.

Estate Planning, TrustErica EndykeAugust 15, 2022education trusts, education savings, education planning, estate planning tools, irrevocable trust, 529plan, education savings account, trusts and wills, trusts, tax savings, education 529 plan

3 Critical Considerations For How To Save For Your Child’s (or Grandchild's) College Education—Part 1

If you have started to save for your child or grandchild’s college education, it’s worth considering whether to use a 529 plan, an education savings account, or an Irrevocable Trust.

Here’s what we think you should consider as you decide:

First, consider whether you want your offspring to have broader options than just the traditional college experience.

Since the pandemic's start, college enrollments have declined by over one million students over the past two years. With college tuition getting more and more expensive, many students are considering alternatives to the traditional higher education path.

Estate Planning, TrustErica EndykeAugust 9, 2022irrevocable trust, trust, savings account, college student, education savings, tax savings, education trusts, trusts and wills, planning for kids, education planning