Financial backing can give your children a boost that will pay off for a lifetime. To ensure that they have money to attend college and set out on their own, you’ll need to start saving money now. Here’s a look at six of the best methods to secure your children’s future.
Prepaid tuition plans
You can ensure that your kids have a college education in their future by starting an investment account today. While these accounts are ultimately redeemed by colleges and universities when they’re needed, they are administered by states in the meantime.
This is an account for your child that is controlled by you until he or she is an adult. Numerous options are available, including amounts invested, methods of reinvestment and types of funds to deposit. Each year’s initial $850 of earnings is untaxed, and the following $850 is annually taxed according to your child’s rate, with the remainder falling under your own tax rate.
Coverdell education savings account
Coverdell education savings accounts are essentially IRAs designed for future education rather than retirement. You can add as much as $2,000 annually after taxes, and the account’s growth and eventual withdrawal for education are both untaxed.
Silver demand continues to grow amid concerns about the dollar’s future. Used in everything from luxury goods to electronics, silver is easy to liquidate when the funds are needed for tuition. Market values are practically sure to rise, but you’ll get the best results if you seek silver investing advice that can be found online beforehand.
Regular IRA and Roth IRAs enable saving for either retirement or higher education without much of a tax burden. Depending on your income and whether you have a retirement plan with your employer, you may or may not be eligible for traditional IRAs. Although Roth IRA contributions aren’t tax deductible, your earnings are untaxed as long as you take them out for tuition after the holding period of five years.
529 college savings plans
Untaxed college funds can be grown in these accounts. There are no income restrictions, and the government does not tax withdrawals used for college. Just $25 is necessary to get started, the funds can be used at any college in the country, and maximum lifetime contributions are as high as $300,000 depending on the state.
Higher education continues to rise in cost, but it’s not out of reach if you start saving early. The six options listed above are all good avenues to explore. When it’s time for your children to attend college, they will appreciate your dedication to their future.
About the Author:
Anita Ginsburg is a freelance writer from Denver, CO. She graduated from Colorado State University in 2004. She enjoys writing about education, home and family, finance, and much more. Take a look at Money and Markets for silver investing advice to save money for your children’s future.
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