Parents and guardians must start education planning when their kids are young to ensure they’re ready for college fees. It can be tough to know how to prepare for these future finances. Here is some information on ways to provide security for your soon-to-be student.

How to Plan for a Child’s College Financial Needs

1. Start Now

If possible, create an education planning fund when your child is born so you can start saving right away. For older kids, create an account now to begin accruing interest as soon as possible.

2. Look Into College Funds

Banks offer college savings plans that provide unique tax benefits. You may want a 529 plan that offers federal and state tax-free investment earnings for students. Coverdell education savings accounts have a $2,000 annual cap but offer federal-free funding for individuals under a certain income level.

UGMA accounts provide stocks and mutual funds that parents or guardians control until their children reach adulthood. However, they can count against financial aid and are not tax-free.

IRA accounts are often associated with retirement savings, but these funds can be used for education planning if they’re over five years old. You’ll pay the taxes for these accounts before removing money for a Roth IRA or only when you need to take money out for a traditional IRA.

3. Don’t Skimp on Your Retirement

It’s tempting to put any bonuses and extra funds toward your children’s education planning. However, students have access to many financial aid options, and you need to prepare for retirement.

Contribute enough funds to your retirement to earn a full employer match, if possible. Then, put extra funds toward college savings and increase your retirement contribution percentage if your earnings improve. This way, you’ll be prepared to live off these funds when you stop working, and your child will also have access to some money to help them get through post-secondary school.

Those interested in financial education planning should contact Stephan and Associates Wealth Management in Greene County, OH, founded by Brian Stephan, CEO and General Manager. The financial services company can plan for retirement, set up life insurance, or plan your estate. Call the Xenia-area financial advisers at (937) 374-2002 or visit the website for information on their services and financial guides to achieve short- and long-term financial goals.

The content of this article is for informational purposes only and should not be considered a recommendation of any particular security, strategy or investment product or investing advice of any kind. Information contained herein has been obtained from sources deemed reliable but Spire Wealth Management, LLC and its affiliates do not guarantee its accuracy. The views and opinions expressed in this article are those of the authors and are subject to change. Index information is provided for illustrative purposes only. Indexes are unmanaged, do not reflect deduction of fees and expenses and are not available for direct investment. Investing involves risk, including the possible loss of principal.

 Spire Wealth Management, LLC is a Federally Registered Investment Advisory Firm. Securities offered through an affiliated company, Spire Securities, LLC., a Registered Broker/Dealer and member FINRA/SIPC