College Planning
Why Save For College?
A college education can be the key to unlocking your child’s full potential. A good education will pay a lifetime of benefits, from income to creativity and independence. But education is an investment, and one that is getting more expensive each day.
529 College Savings Plan
A 529 College Savings Plan offers a tax-advantaged way to invest for the rising cost of college education.
Recipients will not pay federal income tax on the earnings while the account is invested and no federal income tax when money is withdrawn to pay for qualified college expenses at any accredited post-secondary school in the United States. (These provisions are set to expire after 2010 unless extended by Congress. Some states may offer state income tax benefits to residents.) Please consult a tax advisor.
Anyone can contribute on behalf of the individual beneficiary, including parents, grandparents, other relatives and family friends. Whoever opens the account maintains control over the withdrawals, which gives three options if the beneficiary decides not to attend college: change beneficiaries, leave the assets invested in the plan for later use, or withdraw the assets (may pay penalties and taxes).
Coverdell Education Savings Accounts (formerly known as Education IRAs)
A Coverdell Education Savings Account is an excellent way to put aside money for a child to use for education expenses. This is a type of tax-advantaged savings account designed specifically for paying qualified education expenses.
Contributions are non-deductible and distributions are tax free if used to pay for the account beneficiary's qualified expenses for costs of kindergarten through 12th grade at private schools, or at a college or trade school.
There is a $2,000 annual limit per beneficiary. Anyone, whether related to the beneficiary or not, may contribute to the Coverdell Education Savings Account, however there are limits to contributions based on income level. Any funds remaining in the account after the beneficiary reaches the age of 30 must be rolled over to another Coverdell Education Savings Account benefiting another family member. Otherwise, taxes may be assessed.
To find out more about college planning, please contact our Certified Financial Planner (CFP®):
John V. Lyons, Investment Executive, 508-234-8112 Ext. 1009, or Email.
Important Information
This website is for informational purposes and nothing on this website constitutes an offer to purchase or sell securities.
For more information about a particular non-deposit investment product, ask for a prospectus. Please read it carefully prior to investing.
Investment products are offered through Infinex Investments, Inc. Member FINRA/SIPC. Insurance products are offered through Infinex Insurance Agency of Massachusetts, Inc. UniVest Financial Services is a trade name of UniBank. Infinex and UniVest are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
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