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Why You Should Include Your Financial Advisor In The College Savings DiscussionSubmitted by Bloomfield Hills Financial on December 21st, 2018
As tuition costs rise and students shoulder staggering debts in order to pursue a post-secondary education that will set them up for the new economy, the conversation surrounding college planning is evolving. Parents are looking for ways to ensure their kids are supported and teenagers are starting to develop plans to set their own savings aside.
As a financial advisor, there are myriad ways we can play a role in helping you find the right strategy that helps you and your children meet your education goals while answering questions that arise along the way.
Should I contribute to my child’s education?
It’s a valid question – what value is there in having your child shoulder the responsibility of their own education? The truth is, every family is going to be different. Maybe you don’t want to pay 100 per cent for your kids’ education? Or maybe it would be tax-inefficient not to contribute some of the wealth you’ve accumulated to their schooling. This is where we can play a vital role as an objective voice weighing the pros and cons of either decision as well as examining what the financial cost is for each choice.
If I am going to contribute, when should I start saving?
As with any plan, starting early is key. Deferred-tax savings plans offer a way to earn income from your investments while squirreling away funds to set your kids up. Together, we can take a holistic look at your financial picture, break down how to enhance your returns by starting early, figure out what the right amount is to put away while still pursuing other financial goals, and decide what savings plan best fits your individual needs.
How should my plan evolve?
As your child grows into a teenager, it’s time to adjust your plan to fit their changing needs (and your own). We can examine the interplay between your retirement savings and their education (have you set aside enough for both?) along with how your plans will impact your day-to-day quality of life. This is also the time to optimize your financial aid strategy and understand what your child may or may not be eligible for. If you’re not eligible, we can use this as a forum to develop an alternative strategy that helps minimize your out-of-pocket expenses while optimizing your tax strategy.
There’s no question that attaining a post-secondary education can help give your kid an edge in the workforce and help them pursue a career they’re passionate about. It’s our role to help you eke out the path forward. Let’s work together on a college plan that fits you and your child’s needs.