Adam Kuettel - College Savings Guide

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C O L L E G ES A V I N G SG U I D E


O V E R V I E WBeing a parent means making hundreds ofimportant decisions. You have to choose adoctor, purchase the right home, pick the rightschool… The list goes on and on.“How should we save money for college?” is onequestion that many parents have. The price ofcollege tuition is incredibly high and is expectedto remain expensive.This presentation will help you decide how youshould save your money.


S T A R T E A R L Y A N DA D D F U N D S O F T E N

Parents who start saving early see the best results with their money. In fact, it’snever too early to start saving. Even if you are only thinking about having children, it doesn’t hurt to startsaving. The more money you have in the bank when your child enters school the lesshe or she will have to borrow. Also, when you start early the savings’ earnings will help fund the account overtime. If you wait until your child is in high school, though, you’ll end up having tocontribute more to the fund.


5 2 9 P L A N F O RC O L L E G E S A V I N G S

The most popular college savings plan is a 529 plan. Up to 12 million families inAmerica use it. The money that you put into the plan grows without tax fees. When the money from the fund is used to pay for college, you don’t have to payincome taxes either. You will face taxes, though, if you use the money for anything besides collegetuition and related expenses. There are two different types of 529 plans: prepaid tuition plans and collegesavings plans.


HOW YOUR S AVI NGSAF F E CT F I NANCI AL AI D

Even if you have a sizable college savings fund, you should still fill out the FAFSA(Free Application for Federal Student Aid) every year. The application takes into account your family’s income and savings, and it willdetermine how much you have to contribute to pay for education. Assets owned by children, like a Coverdell Education Savings Account, areassessed at a higher rate than parent’s assets. FAFSA doesn’t assess 529 plans owned by a grandparent until the funds areused to pay for college expenses.


K N O W T H E L A W

Lawmakers are aware of how expensive college is, and many of them work toreduce the cost through different laws. It’s important to keep up with both the federal and state laws that relate tocollege tuition. Some states have different guidelines on how 529 plans can be used, howmuch money can be contributed, and other related details.

Adam Kuettel - College Savings Guide

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