Paying for College – Why just writing the check may not be the best optionSubmitted by Financial Planning Solutions, LLC on September 20th, 2017
Last night we conducted our first College Financial Workshop here in Newton, MA. With participants asking lots of good questions and taking notes throughout the session, we think it was a success.
The idea to launch the workshop came from years of talking with parents of college-bound students about the challenges of understanding and paying for college without derailing their retirement goals.
This is a stressful topic particularly for parents that find themselves with little saved for college or retirement. Basically, time is running out and huge tuition bills are just around the corner.
In New England, especially, parents feel guilt and peer pressure to send their son or daughter to the very best college possible. It is often a recipe for the perfect financial storm.
Recently I spoke with a parent who heard about our workshop. While she could not attend, we talked for a bit about her financial circumstances and the fact that she is getting ready to send her second child off to college. She and her husband own a business in Newton and have a healthy income. She said, “I think we’re going to just write out the check.”
If you have the cash, this sounds like a straightforward approach, right?
Well, probably not. Higher income families have a number of options to structure their finances in a way that frees up cash flow, reduces taxes and simultaneously maintains or expands retirement savings. In addition, small business owners may have additional opportunities to manage this expense and legitimately reduce taxes.
I wish she could have attended.
Sadly, we often see families making pedestrian financial decisions based on generalized advice from the media, friends, or family. With every family and student having a unique financial position and academic profile, this can sometimes lead to costly decisions. Remember, at $65,000 to $70,000 a year for top schools, this is an expenditure of more than $280,000 over four years. And that’s just for one child!
While late planners may have more limited options, there are a number of good strategies to pay for college while keeping your retirement and lifestyle on track. We talked about several of these strategies last night at the workshop.
If you missed the workshop and would like to see if our strategies might benefit you, give us a call or send us an email to set up a complementary 60-minute initial review. Our strategies are not for everyone, but they could save you on taxes and help you successfully navigate college without sinking your retirement plans.
Give us a call. We’re here to help.
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.