教育财政

Private WealthManagement Education Financing With college costs rising faster than inflation, planningfor education financing is more critical than ever. Introduction IntroductionAmong its many benefits, a college education can have a significant impact on future earning potential. It is an important investment. It is also becoming a more expensive Fortunately, if you want to help pay for your child’s or grandchild’s education expenses,numerous financing options are available. These options have various advantages and To help you achieve all your financial goals, education planning needs to be integratedinto your overall financial plan. Education-financing goals must be weighed against This paper will review:•Rising Education Costs•Savings Vehicles Rising Education Costs factors have put downward pressure on college costincreases, but there is no certainty this trend will continueover the long run. Looking back over the prior 40 years,there were much larger tuition increases. For example, inthe 30 years preceding this most recent 10 years, four- Rising Education CostsWhile the value of a college degree continues to have a significant impact on potential future earnings, thepublished cost of this investment has historically increasedfaster than inflation. Over the past 10 years, publishedinflation adjusted (real) tuition, fees, and room and boardcosts of four-year private colleges had annual average It is important to note that these figures are averagelisted costs and expenses vary widely between schools.Additionally, the increases in listed tuition, fees, androom and board are higher than the amount that most Within the past five years there was a period of highinflation, as well as higher non-college starting wages.Starting in 2025 there has been a decline in internationalstudents, and domestic student applications are expected (For Academic Years 1985–1986 to 2025–2026) Savings Vehicles are set by the sponsoring state and generally are quitehigh. You can contribute only cash, not securities. Youretain control of the investment account and name the Savings VehiclesWhether you need to build up assets to finance your children’s or grandchildren’s education or you expectto be able to pay their education costs out-of-pocket, you Valuable estate-planning benefits are also available with 529 Plans A significant benefit of a 529 savings plan are theincome tax advantages. Contributions are not federallytax deductible, though may be in some states. However,plan assets grow tax-deferred and distributions usedfor qualified education expenses are not taxable. Thismeans that any growth in the plan is tax-free as long asdistributions are used to pay education expenses suchas tuition, fees, books, and room and board. Families You can use up to five years of your gift tax annual exclusion(currently $19,000) to front-load the plan. That adds up toa $95,000 immediate contribution—$190,000 for a marriedcouple splitting the gift. The contribution is removed fromyour taxable estate (although there could be estate taxconsequences if you accelerate your annual exclusions and You are able to change the beneficiary to certain familymembers in the same generation, such as a sibling orfirst cousin of the beneficiary—or even to yourself if youare considering going back to school. This will allow youto avoid taxes and penalties if the initial beneficiary hasdecided not to pursue a higher education or does not use This can be particularly valuable if you are in a high-income tax bracket now or expect to pay taxes at a higherrate in the future. Federally tax-free withdrawals areallowed to pay for up to $20,000 of K-12 tuition annually, A potential disadvantage of a 529 plan is that you mustselect your investments from the options offered bythe plan, and you can reallocate plan assets twice percalendar year. However, most plans offer a range of State tax benefits are available for expenses that the statedeems as “qualified”, which may or may not include K-12tuition. In order to avoid potential taxes and penalties, it Individual states sponsor 529 plans, and while you cancontribute to any state’s plan, you may be eligible for astate income tax deduction for contributing to your ownstate’s plan. In addition, seven states offer a tax deduction Before choosing a 529 plan, compare both the investmentoptions and the fees of several plans. If you are unhappywith your current plan, you can request a tax-free rollover toanother 529 plan up to once per 12-month period. Caution: Savings Vehicles Another potential downside is the “kiddie tax.” It applies toall dependent children under age 19 and also to dependent Another potential drawback to a 529 plan is that anydistributions attributable to growth that are not used for Trusts In addition, 529 plans come in the form of a prepaid tuitionplan, which allows you to pay for future tuition at today’sprices. The tax treatment is similar to a 529 savings plan.However if