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How will you send
you kids to college if you can hardly afford |
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To get College
Funding, trying to
understand the different college savings/grant/loan programs (529
plans, prepaid tuition plans, Coverdell ESA, and custodial accounts)
is almost impossible because they are so complex. With some of
the plans you get a tax deduction. With others you can access
the money tax free - if you use the money for college expenses.
But if you don't, there are severe taxes and penalties. Unless
Congress renews them, most of these tax benefits will expire in 2010
anyway. There are over seventy 529 college funding plans, all with different
investments, rules and costs, and with many of them you give up
control of your money. Then there are still the college financial aid formulas which have their own problems for you: Free financial aid is reduced by 35% of the amount kept in a child's name - and 5.5% in the parents. Don't despair! You can eliminate many of these problems by saving instead in a Private Plan (PP). The monies grow tax-deferred and you can take them out tax free for your college funding expenses. Best of all most college aid formulas exclude these plan assets, and parents retain control over the cash values (not the child - it is your money). Bonus, if your child does not go to college these monies are now part of your tax free Private Retirement Plan! If your child is just a few years away from starting college the cash value in a PP may not be "ready" to pay these expenses. Don't despair! Sometimes a PP needs about 10 years to really start "rolling". So in the meantime obtain student loans (and grants). After graduation use the PP plan earrings to payoff the loans - and/or to pay for graduate (medical, law) school! You may be surprised that at your retirement it will also STILL be able to pay you tax free income additionally! There is one other possible benefit too...the other plans do NOT have. It includes a death benefit. If the worst happens and an insured parent dies the PP can guarantee ALL the monies that will be needed to see your child (or grand-child) through college. What greater legacy can you plan for and leave than that?! Just by changing how you save! Even if you are making over $100,000/year we can usually put you in a position to qualify for college funding when utilizing the FAFSA Application. Various strategies to reduce income/assets, such as shifting income to other family members for example, can actually increase the amount of college tuition you will pay. The key to increasing your eligibility to get college funding is to have a low “adjusted gross income” on your tax return. For financial aid purposes, the colleges will be looking at taxable income and untaxed income. When considering their chances for financial aid, many families believe that the colleges are only interested in how much income you make from work – but that is not true. Financial Aid Officers (FAO) working for the colleges where your kids apply are always looking at how much that they can avoid giving you money, and get more out of your pocket, thus saving their college money.
Also, using the Money Merge Account explained elsewhere to pay down your mortgage faster (and save hundreds of thousands of dollars) can also be used to help fund college expenses. Below is graphic showing typical pay down with MMA vs. standard 30 year loan. Money Merge Strategies – mortgage paid off in 1/3 the time, saving in this example $89,000 in interest. Recommended Reading: “Paying For College Without Going Broke” by Chany and Martz
Debt Elimination Home Contact Us Senior Opportunity Mortgage Reduction
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