Capitol region parents: Although sending your child off to Union, Siena, or SUNY Albany might seem a long way off, soaring tuition costs make it worth your while to start saving now. Now is the time to get a strong savings program in place and put some money away every month.
Tax-free earnings add up
Contribute up to $2,000 per child annually into a tax-advantaged Coverdell Education Savings account. Your contributions are taxed, but the earnings and withdrawals are federal income tax free when used for qualifying expenses.
That means the earlier you start, the more time your money has to grow tax-free. Just look at the benefits:
- Friends and family members can open accounts along with yours. Grandparents, aunts, and uncles can help out....just keep yearly contributions under $2,000 total per child.
- Custodian control of the account puts you in charge and prevents unwanted withdrawals.
- You may transfer the account tax-free to another family member. So if one child doesn't go to college, you can give the funds to another.
With tuition at a private college at $161,000 for four years...and climbing, it's time to get saving.
Dave Balog helps families reduce expenses and build savings. dbalog99@gmail.com 355-0967.
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