With the new school year starting, parents cannot help but think of the expenses that come with the season, along with how these increase as their children move from one level to the next. If you are one of the many parents already thinking ahead for your child’s college education, we at Financial Brokerage Services, your trusted DC and Maryland financial advisor, can help you prepare for it with 529 plans.
These plans, named after Section 529 of the Internal Revenue Code, are tax-advantaged investment tools that encourage saving up for future college expenses. Also known as “qualified tuition plans,” they are sponsored by states, state agencies, and educational institutions. They come in two types: the pre-paid tuition plans and the college savings plans. The pre-paid type allows parents to purchase credits or units for tuition at participating colleges and universities. In some cases, room and board may also be included while excess credits may be used to pay for other qualified expenses.
On the other hand, college savings plans are state-administered investment vehicles which an account holder (parent) puts up for the beneficiary (student). The investment, which is expected to grow over time, will then be used to pay for the college tuition and other expenses. These college plans are often invested in different options like stock mutual, bond, and money-market funds, as well as age-based portfolios for capital gains.
According to a report by the College Board, the average annual cost of tuition and other related expenses for school year 2012-2013 reached $29,056 for private colleges. Meanwhile, public colleges charged an average of $8,655 for state residents and $21,706 for out-of-state residents. A considerable sum of money is really required to secure a college education, and, to prepare and generate such amounts, people may need the help of a trusted financial advisor in DC and Maryland like Financial Brokerage Services.
We will work with you every step of the way by defining your specific goals, identifying available and viable resources, and choosing the best 529 plans that best suit your current financial situation. We will make sure that the investments we will put your money into are safe and reliable and will bring no headaches for you in the future.
Apart from college planning, we also specialize in estate and retirement planning, health and life insurance, annuities, and employee benefit programs. Planning for the future will never be tedious and problematic with Financial Brokerage Services.
Be sure to check out our website for more information and to request for a quotation.