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