Broker Check

College Funding: It Pays to Know Your Options

| June 18, 2019

With two in college plus a soon to be 6th grader and 2nd grader, "college" funding is topic many clients ask about and I enjoy talking through.

Before we start with "college" funding, a couple of points to help frame the discussion…

  1. You can get a loan for a lot of things in life.  You can't get a loan for retirement.
  2. Translation: Before you even think about setting money aside for post-high school education, you need be setting aside 15% into retirement (401(k)s, Roth IRA, etc.)
  3. Will “college” continue to evolve to include more options in the skilled trades? Or additional on-line learning opportunities?  College is ripe for disruption given the continued accelerating costs.

 Given all the above, flexibility is one feature to consider when planning for post-high school education of young ones.

 Below is quick run-down of common methods used:

  1. 529 Plan - some tax savings and strings attached;
  2. Coverdell - some tax savings and strings attached;
  3. UGMA/UTMA - becomes property of child at age 18 or 21 based on state you live in;
  4. Roth IRA - contributions are accessible prior to age 59 1/2; or unrestricted access after age 59 1/2;
  5. Joint Account in parent(s) name(s) - no tax deduction, complete flexibility.

 Here is a link for more

 Or contact us with your college funding questions via email at or phone at 810-471-3732.