Child Education

Help Your Children Benefit from a College Education

Do you realize that the average total cost of an education at a four-year public college or university is over $45,000? And, that it’s more than $100,000 at a private school?

Few would disagree that a college education is worth every dollar spent – after all, studies show that college graduates earn a million dollars more over their lifetime on average than non-graduates. Still, though, that leaves the challenging task of actually paying for the education.

So, what’s the best advice on accomplishing this? Start saving early. And, there are a few excellent ways of doing so.

Section 529

These plans – named after the applicable tax code – allow you to contribute money into a fund earmarked for education where the money can grow on a tax-deferred basis. Each state sets its own rules regarding Section 529 plans, and governs the plans.

Section 529 plans come in two types: college savings and pre-paid tuition. The latter allows you to make your tax-deferred contributions – through installments or a lump sum – and lock into the current cost of an education at your selected school. Pre-paid tuition plans are best for children who are certain about where they’ll attend college.

Both plans allow you to make large annual contributions without any income restrictions.

Coverdell Education Savings Accounts

You can contribute up to $2000 each year to these accounts on a tax-deferred basis. These plans offer more flexibility than Section 529 plans, as you can withdraw money from them for certain elementary and secondary education expenses, and invest your contributions in individual stocks, mutual funds, or bonds of your choice.

Life Insurance Policies

These policies can help in two ways. Upon your death, they will provide funds that can be used to pay for the cost of a college education for your children. But, you can also draw against the cash value of your policy to obtain the money needed.

All of these options contain benefits as well as restrictions that may be difficult to understand. So, it’s smart to discuss these choices with a qualified financial advisor.

Even if you didn’t start saving early for college, there’s still likely time left to make some difference. But, again the sooner you begin, the better off your children will be.

Let Emerging Insurance Brokerage set up a child education fund that’s right for your situation.

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Noori Insurance Agency, Inc.
DBA: Emerging Insurance Brokerage Services

37371 Fremont Blvd Ste B.
Fremont CA 94536

tel 510-796-4929
fax 510-796-4928