| With higher education tuition increasing
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| | counts against your kid's financial aid
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| at double digit year over year
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| | eligibility.
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| percentages an effective saving plan for
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| | Uniform Gifts to Minors Act/Uniform
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| your kid's education is becoming much
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| | Transfers to Minors Act
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| more important than it has been before.
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| | (UGMA/UTA Custodial Account): - The
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| Most families will discover that their
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| | benefit of a UMGA/UTA Custodial Account
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| future higher education costs will be
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| | is that there is no limit on the
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| much more than they have saved for their
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| | contribution and it is easy to set up at
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| kid's education. This leaves many kids to
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| | most financial institutions. However, the
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| be faced with obtaining financial aid to
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| | limitations far outweigh the benefits.
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| pay for a portion of their college
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| | The first limitation of a UMGA/UTA
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| education. The goal of this article is to
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| | Custodial Account is that these types of
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| explore the pros and cons of 4 common
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| | accounts offer very little tax advantage.
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| investment options when saving for
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| | If your child is under 14, only the first
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| college. This article will also explore
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| | $800 of income is tax free, the next $800
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| why some of these options are better than
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| | is taxed at your child's tax rate and
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| other when considering a portion of your
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| | after that there is no tax benefit at
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| kid's education may be funded by
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| | all. The other big limitation is that the
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| financial aid.
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| | account has to be set up in your child's
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| 529 College Savings Plan: - A 529 college
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| | name. As a result, if your child needs
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| savings plan is a fairly new investment
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| | financial aid all of the assets will be
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| option for college saving. It allows just
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| | reviewed at a 35% rate. Therefore, this
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| about anyone to save for college. There
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| | type of account is not advisable for
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| is a long list of benefits of a 529
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| | those who may need financial aid.
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| college savings plan, but perhaps the
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| | Coverdell Education Savings Account
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| most important is that your earnings grow
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| | (CESA): - A Coverdell Education Savings
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| tax free if you use it for qualified
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| | Account is very similar to a 529 college
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| education expenses. Additionally, the
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| | savings plan. The main difference is that
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| maximum amount you can contribute to a
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| | with a Coverdell Education Savings
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| 529 plan can go as high as several
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| | Account you can only contribute $2000 per
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| hundred thousand dollars depending on
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| | child and to qualify your adjusted gross
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| your State. In the event you do not use
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| | income must be less than $110,000 if
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| the funds for college, you can still
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| | single and less than $220,000 if married
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| withdrawal your earnings, but you will
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| | filing jointly. The account is classified
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| have to pay taxes and a 10% penalty. The
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| | as a parent's asset so less that 6% of
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| penalty will be waived if your child
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| | the value counts against your kid's
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| receives a scholarship, or your child
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| | financial aid eligibility.
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| becomes disable or dies.
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| | In the end, parents should consider
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| 529 plans can typically be purchased
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| | planning for college to be a highly
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| through a broker or mutual fund company,
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| | important process. The above 3
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| but a disadvantage is that investment
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| | alternatives can make this process much
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| choices can sometimes be limited. Since
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| | more easy and financially sound.
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| qualifying for financial aid is based on
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| | Copyright (c) 2005, by Jay Fran. This
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| a calculation that considers your kids
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| | article may be freely distributed as long
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| assets, another big benefit of a 529
| |
| | as the copyright, author's information
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| college savings plan is that the money in
| |
| | and the below active live link is
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| the plan is classified as a parents
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| | published with the article.
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| assets so less that 6% of the value
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| |
|
