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college planning

Unlocking a Bright Future:
Navigating Financial Planning for Education

Investing in your child's education is one of the most important decisions you can make for their future. Whether you're saving for primary school, college, or beyond, a well-thought-out financial plan can help you achieve your education funding goals. Your Evolve team can help you explore some key avenues for education planning.

 529 college savings plans

​A 529 plan is a tax-advantaged savings vehicle designed specifically for educational expenses. These plans come in two primary types that your evolve planning team can help you with: prepaid tuition plans and education savings plans. Prepaid plans allow you to lock in today's tuition rates at eligible institutions, while savings plans provide investment options for higher education costs. The earnings in a 529 plan grow tax-free when used for qualified educational expenses, making them a popular choice among parents and grandparents.

College Campus
Custodial 401(k) Accounts

Certain employers offer custodial 401(k) accounts, permitting employees to set aside funds for their children's educational expenses. These accounts function in a manner similar to conventional 401(k)s but are earmarked specifically for education. Contributions are typically made through payroll deductions, and employers might even offer matching contributions.

Custodial 401(k) Accounts

In addition to personal savings and investment avenues, don't overlook the possibilities presented by financial aid and scholarships. Completing the Free Application for Federal Student Aid (FAFSA) can open doors to federal grants, work-study programs, and subsidized loans. Scholarships represent another valuable resource, with numerous organizations extending financial support based on academic achievements, athletic prowess, and other accomplishments.

UTMA (uniform transfer of Minors act) accounts

UTMA accounts are custodial accounts that afford you the opportunity to save and invest on behalf of a minor, often a child or grandchild. These accounts can encompass various asset types, including stocks, bonds, and real estate. However, once the child reaches the age of majority (typically 18 or 21, depending on the state), they gain control over the assets. UTMA accounts offer flexibility but may not be the ideal choice if you wish to maintain control over the funds for educational purposes.

Children in School Bus
roth IRA for education

Although Roth IRAs primarily serve as retirement accounts, they can also serve as a reservoir for funding education. You can withdraw your Roth IRA contributions at any time without encountering penalties or tax consequences, making it a flexible choice, especially if you harbor concerns about accessing your savings before retirement. However, it's essential to exercise caution and refrain from depleting your retirement savings excessively.

Coverdale education savings accounts (ESA)

Coverdell ESAs represent tax-advantaged accounts meticulously crafted to accumulate funds for qualified education expenses, encompassing primary and secondary school costs. Contributions do not yield tax deductions, yet the earnings grow tax-free and can be withdrawn without tax implications when utilized for educational purposes. Coverdell ESAs provide versatility, offering a spectrum of investment alternatives.

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