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College Planning

College costs seem to increase exponentially. As a result, parents are constantly worried about paying for college.  We can help you determine the projected costs for your children’s education and the amount that you will need to set aside in order to fund this need. Importantly, we can also calculate the impact that setting funds aside separately for college will have on your own retirement spending goals. 

We will also help you sort through the myriad of investment options to ensure that you are saving in the most tax-efficient manner. Custodial accounts offer the benefit of reduced taxes, but in the financial aid calculation, custodial assets will tend to increase the expected family contribution. Additionally, upon reaching the age of majority, custodial assets become the property of the child. 

Assets held in a 529 college savings plan are counted as an asset of the owner, therefore, a 529 plan owned by a parent will result in a relatively lower expected family contribution. But 529 plan assets owned by a grandparent are not counted at all in the financial aid calculation, resulting in the lowest expected family contribution. 

We believe every Illinois family with a child in college should establish one of the Illinois 529 plans. A married couple filing jointly can receive up to a $20,000 state tax deduction simply by depositing $20,000 into an Illinois 529 plan money market account, and then using these funds to pay for qualified educational expenses. You receive the $20,000 state tax deduction by simply funneling your tuition payment through an Illinois 529 plan. 

Give us a call to see if you are missing out on any other college savings strategies.


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