Going to college has long been part of the American dream, and statistics show that it's a dream worth pursuing. Over a lifetime, college graduates can expect to average at least 40 percent more income than high school graduates. But with college tuition soaring, how can you ensure you'll have the funds you'll need when your children are ready for college?
Today, a combination of savings, loans, grants, scholarships, and work-study programs can help make the dream of college a reality for almost everyone. Like all other financial plans, starting early will enable your money to grow and work harder for you. Here are some ideas to consider:
For more information on how Mutual Trust Life Insurance Company can help you develop an effective plan for college funding, click here.
Start planning early by estimating the amount of money you'll need to set aside each month, depending on your estimated return on investment and your timeframe, to fully pay for a college education.
Consider purchasing a whole life insurance policy with a Guaranteed Purchase Option (GP0) for your children as a way to save for their education. When compared to other funding options, this method can save money on taxes and fees. To learn more about funding a college education with the help of whole life insurance, click here.
Think about investing in CollegeSure CD's, Series EE U.S. Savings Bonds or State Tax-free College Bonds.
Investigate setting up a UGMA (Uniform Gifts to Minors Act) account or a UTMA (Uniform Transfers to Minors Act) account to make gifting of money or assets to children easier and more efficient.
Explore possible tax credits with the Hope Scholarship and Lifetime Learning Credit.
Establish an Education IRA or a Roth IRA to fund a college education.
Consider setting up a prepaid tuition plan. When you invest in the plan, your investment buys a certain number of tuition credits at your state's college or university system at today's prices. No matter what increases take place in state tuition rates in future years, the number of semesters or years you have purchased for your child today are guaranteed.
Look into a 529 savings plan. Although similar to a prepaid tuition plan, it lets you invest in a tax-advantaged way against the rising costs of education.
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