As high school seniors prepare to celebrate graduation, many of their parents are already thinking about the large bills that will accompany the start of college in the fall. Meanwhile, the price of higher education continues to rise at a time when most household incomes are not. Baird’s Wealth Management Insights brief for May offers ideas to help you and your child make this important investment wisely.
What you should know:
1. College is one of the largest investments most individuals make. However it is funded, higher education is a substantial expense for any family. For the 2011–2012 academic year, published averages for tuition, fees, room and board combined were:
2. Future tuition increases are extremely likely.
3. Student loans
consider where loans are concerned:
4. May is “529 Month.”
State-sponsored 529 plans provide a tax- advantaged way to set aside money for the cost of a child’s education while taking full advantage of compounding over time.
∙ Accelerated gifting techniques for 529 plans offer the option for donors to maximize their contributions in a single year.
∙ Earnings grow tax-deferred and are not subject to federal tax on withdrawals used for qualified higher education expenses.
* Trends in College Pricing 2011 (The College Board)
What You Should Do Now:
An education is an important investment in your child’s future – and a subject worth doing your homework on. Investigate your financial aid options carefully and talk to your financial advisor annually about your investments and savings plans for the future college graduate in your life.
Article provided by Robert W. Baird & Co. with the authorization of its author for Evan Guido, Vice President, Financial Advisor at the Sarasota office of Robert W. Baird & Co., member SIPC. The opinions expressed are subject to change, are not a complete analysis of every material fact and the information is not guaranteed to be accurate.
Evan R. Guido
Vice President of
Private Wealth Management
One Sarasota Tower, Suite 806
Two North Tamiami Trail
Sarasota, FL 34236-4702
941-906-2829 Direct Line
888 366-6603 Toll Free
941 366-6193 Fax
Got a question? Ask Guido!
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