Planning for your children's (or grandchildren's) educational needs can be intimidating, but not when you have a CPA and financial planner on your side! The tax code is full of nooks and crannies, and when it comes to education planning, there are numerous options, all of which are in my wheelhouse. With college inflation rates soaring year after year, many parents and grandparents wonder if sending one of more children to college will be possible. In order to successfully fund your child or children's future, you need to save a specific amount, monthly or annually. Well, how much is that? The calculations are simple enough for a financial planner, but the calculations are also based on numerous assumptions. What if those assumptions turn out to be false, or life circumstances change? That is why I perform Monte Carlo Sensitivity Analysis, which uses complex probability calculations and random number generations to predict the probability of reaching your educational savings (or investment and retirement) goals, and we can change and update your plans accordingly, as contingencies unfold.
Anyone can crunch some numbers, and rattle off the advantages of the AOTC or Lifetime Learning Credit, but those credits, even coupled with a CESA, may barely put a dent in the higher educational cost pool. Depending on your unique family situation, it may be a combination of Section 529 Plans (No-income phaseouts), Series EE Bonds, a CESA, or a disbursement from your Traditional, Roth, SEP, or SIMPLE IRA, or perhaps an Employer's Educational Assistance Program. These are all tax-advantaged educational funding vehicles. As part of your comprehensive financial plan, I will help you choose the best combination of tax-deferred education vehicles, coupled with the appropriate educational tax credits to help you reach your secondary, and college funding goals, while minimizing your tax, gift, and potential estate tax costs.