College Costs — Having a Smart Plan in Place

College Costs — Have a Smart Plan in Place
-------------------------------------------------------------------------------

With the cost of college doubling every 12 to18 years, it's imperative that parents develop a college savings strategy. Having even a modest plan in place can produce dramatic results: Investing just $100 a month for 18 years will yield $48,000, assuming an 8% average annual return. Here are three common college savings plans:

529 Savings Plan   

Contributions are nondeductible. Earnings and withdrawals are tax-free if used on qualified education expenses. Most plans let you save in excess of $200,000 per beneficiary. There are no income limitations or age restrictions, and you can change the beneficiary to another family member, including yourself.

Coverdell Education Savings Account (ESA)

Formerly the Education IRA, ESA contributions are nondeductible and limited to $2,000 per beneficiary per year. Earnings and withdrawals are tax-free if used by the beneficiary before age 30 on qualified education expenses. Eligibility is constrained by Modified Adjusted Gross Income (MAGI): $190,000 or less for couples or $95,000 or less for singles.
Prepaid Tuition Programs

Prepaid tuition programs allow parents to lock in a tuition rate and begin paying the cost of college today. Many states have their own programs but might limit usage to state institutions only. Alternatively, there's a 529 version that can be used at any accredited degree-granting school, whether it is private, public, undergraduate or graduate, regardless of location.

Whichever college savings strategy you choose, look for low-cost plans with an age-based portfolio that gradually shifts the asset allocation from stocks to bonds and cash as your child ages.


Please Speak With Jason Shroot Your License Financial Insurance Agent & Consultant About Any Insurance or Financial Products At 714-988-3325 or Via Email At jason@diversifiedinsurancequotes.com

Will You Be Ready to Retire?

Will You Be Ready to Retire?

The Employee Benefit Research Institute’s 2010 Retirement Confidence Survey showed that more than 30% of today’s workers haven’t saved for retirement, up from 25% in 2009 and 28% in 2008. It also indicates that, of those who do have savings, one in four has saved less than $1,000. This may be why 40% of Americans plan to postpone retirement.

The Center for Retirement Research indicates that four out of 10 individuals between the ages of 45 to 59 expect to retire four or more years later than they had expected to before the economic slump, and more than 25 percent find the current level of stress related to the downturn to be equal to or greater than that caused by the 9/11 terrorist attacks.

Why do I quote these statistics? Because it indicates the lack of planning in the workforce and the need to rely on financial professionals for guidance through the planning process. We all tend to procrastinate, but the longer we wait to do this type of planning, the harder it will be to achieve our retirement goals. Start your planning today!

For Questions & Quotes Contact :

Jason @ 714-988-3325

jason@diversifiedinsurancequotes.com