I nvest in Y our G randchild ’ s E ARE 529 PLA
become more conservative as your beneficiary approaches college age. The downside with these sorts of plans is that there will always be risk involved; there’s no guarantee on investment returns. PREPAID TUITION PLANS States and some private institutions have 529 plans available that let you pay for your grandchild’s tuition up front, well before they are ready to head off to college. Some plans guarantee to cover a set amount of future tuition expenses in exchange for a lump sum or payment plan. Other plans allow you to buy “units” or “credits,” which translate to a fixed percentage of an institution’s tuition. Essentially, you pay the cost of tuition today rather than what it will cost by the time your grandchild goes to college. Prepaid plans are far less risky than savings plans, but they aren’t as flexible. They often limit options to state schools or select institutions, though most plans offer some form of reimbursement option if your beneficiary decides to attend another school. College just isn’t as affordable as it used to be. Knowing your options and finding a savings strategy early in your grandchild’s life can help ensure the avenues of higher education stay open for them.
There are many strategies out there for folks who want to invest in their grandchildren’s education. Different options may be more attractive than others depending on your income bracket and the needs of your family. Traditional strategies, like life insurance policies or paying for your grandchild’s schooling directly, only work if you have the capital. Furthermore, those methods can often negatively impact how much financial aid your grandchild qualifies for. Before you commit yourself to one of these paths, it’s worth exploring a third option: 529 saving plans. 529 plans are income tax-free savings plans specially designed to help you invest in a child’s higher education. In general, these are treated favorably by financial aid assessors, meaning you won’t hurt your grandchild’s chances of receiving government grants. There are two broad types of 529 plans: college savings plans and prepaid tuition plans. SAVINGS PLANS College savings plans use one or more investment portfolios to grow your grandchild’s tuition fund. Each portfolio contains a diversified mix of investments curated by the plan’s money manager. Most plans allow you to select from a menu of portfolio options that best fit your goals and risk tolerance. Many college savings plans start aggressive and then W ord on the S treet MARY AND MONA’S STORIES “Thanks to Kacey and all your team for helping me get stronger and get back to doing everyday activities. I really appreciate that I can continue the exercises I learn at home without fancy equipment. Thank you for the great care!” -Mona G. “I came in with serious pain in my hips. I was unable to stand or sit very long without pain. I had to quit walking in the mornings. I am now able to sit, stand, and walk again. Andrea gave me great, relaxing massages that loosened up the tight muscles. I will miss her massages. Thank you, Andrea.” -Mary M.
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