Broker Check

Podcast Episode 8: Saving for College

October 15, 2018
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Thank you all for tuning into The Denver Wealth Podcast! This week, Zak talks about saving for your child’s college – what are the account options, how much should you be saving, and what will the taxation policy look like for each? Follow us on Twitter @DenverWealth, and join our email club for bi-monthly newsletters.

“We need to save for college – for our children – and we’d like to talk about the different investment vehicles that are available to us.”

Five college investment options:

  1. 529 College Savings Plan [3:30]
  • What if my child doesn’t need this money (i.e. scholarship, military, etc.)? [6:14]
  1. Uniform Transfers to Minors Act (UTMA) [8:01]
  2. Education Savings Account (ESA) [9:35]
  • How much can you invest (without tax consequences) annually? [9:40]
    • Edit: [9:55] Zak mentions that you can invest $14,000 annually into a 529 plan without getting hit with gift-tax rules. That amount was recently changed to $15,000.
  1. Prepaid Tuition [11:51]
  1. Non-retirement Investment Accounts [13:05]

How much should you set aside for college? [1:33]

Narrow down the variables [1:50]:

  • In-state vs. out-of-state tuition, room and board/living arrangements, etc.

Rule of thumb: save 75% of the total cost of room and board [2:44]

Other college savings ideas that we’ve heard [15:14]

Take action! [16:53]

Thanks again for tuning in to The Denver Wealth Podcast this week; we hope you enjoyed it and we hope you learned something! If you have any investment questions, we would be happy to answer those for you. Just send us and email, or find us on Twitter @DenverWealth.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

No strategy assures success or protects against loss.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.