Saving for College

College Savings Planning

In what may seem like a blink of an eye, your children or grandchildren will be trading their toys in for books and heading off to college. By starting to save today, you can help provide the financial resources they need to receive a higher education.

The choice is yours

The good thing is that no matter when you start saving for their college education, there are many options available. Choosing which is best is up to you.

Traditional plans

There are several common methods of saving for college, and the more traditional ways include purchasing U.S. Savings Bonds, opening savings accounts, creating a taxable investment account, building cash value in a life insurance certificate, and purchasing annuities.

Newer plans

Along with more traditional college savings plans, newer options are available, including:

529 College Savings Plans – a 529 College Savings Plan is a tax-advantaged way to save for higher education. There are many plans in the market today, but this plan offers certain distinct benefits to potentially grow your college savings.

With a 529 College Savings Plan:

  • Money may be used for "qualified education expenses"
  • Earnings grow tax-deferred
  • Distributions are tax-free when used for qualified post-secondary education costs
  • Flexible spending options are available
  • Potential state tax deductions are available

Educational expenses most commonly paid for through a 529 College Savings Plan are:

  • Room and board
  • Books
  • Supplies and equipment

Every state has a 529 plan but you are not necessarily required to contribute to your state's plan, nor does the state plan you choose necessarily have to match the state where your child or grandchild's college is located.

Coverdell Educational Accounts – a Coverdell Educational Account can be a great way to save for college, as well as primary and secondary education expenses. Total contributions cannot surpass $2,000 in any year.

Which is right for you?

Woodmen Financial Services can help you find a plan that optimizes your college savings strategy. Talk with your local WoodmenLife Financial Representative to determine whether a 529 College Savings Plan is right for you and your family.

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