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SMART TIPS FOR SMART WOMEN:
Saving for College: Start Now!
by Kathy Paal, CFP®
Brisk fall days. Carpools. Athletic schedules.
Homework. Yep, we’re now back
in the swing of another school year. While
an exciting time for our children as they
embark on another milestone in their lives,
it often brings different emotions for parents.
Thoughts of our sons and daughters
quickly growing up sets off feelings of
pride, dreams for their futures, and the
terrifying question – How will I pay for
college
To give you an idea of just how much a
college education is going for these days,
the College Board estimated that yearly
tuition and related costs at private colleges
in 2006-07 was over
$33,000, climbing over 6
percent from the previous
year. And while state
colleges offer a less expensive
alternative, tuition
continues to rise at these
institutions as well.
So, what’s a good solution
to education planning for
your family If you have so
much as scanned any kind
of personal finance pages
in recent years, then you’ve
no doubt heard of 529 College
Savings Plans. While
there are many that fall
under the 529 title, all offer
individuals the opportunity
to save and invest
$120,000 in tax-deferred
savings in order to fund future
college and graduate
school expenses of a child
or other beneficiary.
Monies can be withdrawn
tax-free, as long as certain
requirements are met. And
you retain control of the
money instead of it being
turned over to your son or
daughter when they turn 18. [Note that
with 529 Plans, if your child decides not to
go to college, you may name another beneficiary.
However, if the money is returned
to you, a ten percent tax penalty will be
due on any earnings].
Your financial planner can help you
determine how much you should invest
each month to place you in a comfortable
position by the time your son or daughter
graduates from high school.
Imagine the financial advantage you give
your children if they can graduate debt free.
What a dream! Remember this though –
with a little planning and discipline, it can
be reality.
Kathy Paal, past Junior League of Baltimore
President, is a CERTIFIED FINANCIAL
PLANNER at Heritage Financial Consultants
in Hunt Valley, MD, and is an investment
advisor representative, registered
representative with Lincoln Financial
Advisors Corporation, a registered investment
advisor and broker-dealer (307 International
Circle, Hunt Valley, MD 21030,
(410) 771-5655, member SIPC, and a
licensed insurance agent. Feel free to email
Kathy at katherine.paal@lfg.com.
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Junior League of Baltimore
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