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COLLEGE PLANNING

COLLEGE PLANNING. Planning For The Rising Cost Of College Education. Foundation for Financial Education(F3E) Sharon@f3eonline.org 240-499-0390. Need for Education?. Tuition Cost Rising Annually. Addressing Rising Costs of College. Increase in Physical Plant Costs

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COLLEGE PLANNING

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  1. COLLEGE PLANNING Planning For The Rising Cost Of College Education Foundation for Financial Education(F3E) Sharon@f3eonline.org 240-499-0390
  2. Need for Education?
  3. Tuition Cost Rising Annually
  4. Addressing Rising Costs of College Increase in Physical Plant Costs Reductions in Endowments, Philanthropic, Alumni Support Keeping Up with the Joneses (Technology ) Student Services/Academic Support
  5. What Options Do We Have? Scholarships Financial Aid, Grants, Loans Educational IRA / Roth IRA UTMA / UGMA 529 College Savings Plans Private Prepaid College Plan
  6. Scholarships
  7. Financial Aid, Grants & Loans Financial Aid - FAFSA Grants vs. Loans Perkins – Low Income PLUS Loans - Parents Stafford Loans Subsidized vs. Unsubsidized Direct Loans PLUS Subsidized and Unsubsidized Consolidation
  8. Educational IRA / Roth IRA Coverdell Education Savings Account (ESA) IRA Designed for Education, not Retirement Contribution Limits - $2,000/yr Full Withdrawal by 30 yrs of age Weighed in Student Aid Roth IRA IRA Designed for Retirement Contribution Limits- $5,000/yr (+$1K if over 50) Waive 10% Penalty (5 yrs min or 59 ½ yrs old) Not Weighed in Student Aid Contributions NOT Tax-Deferred ADDITIONAL TAX PENALTIES
  9. UTMA / UGMA Uniform Transfers/Gifts to Minors Act UTMA – Almost any type of asset, including real estate UGMA – Bank Deposits, Securities (including mutual funds), Insurance Policies Often Used as a “Trust” Donor/Custodian Tax Benefit No Contribution Limitations (Gift, Estate Taxes) Irrevocable Transfers – 18/21 “it’s MINE” Weighed in Student Aid Contributions Tax-Deferred (up to $1,700) SEVERE TAX PENALTIES COULD INCUR
  10. QTP (529) College Savings Plan In-State College College Savings Board Legislative Guarantee Common Plans Include the 1Yr, 2 Plus 2, 5 Yr Residency Required Expires 10 Yrs from Projected Enrollment Date Weighed in Student Aid Nationwide College T Rowe Price Market Volatility Donor Controlled No Residency “Low Maintenance” Plan No Impact on Student Aid Partially/Completely Taxed Prepaid College College Investment
  11. Private Prepaid 529 College Plans Maintained by Oppenheimer Funds Good Up to 30 Yrs from Purchase Current Contribution Limit - $215,950 Currently 270 Private College Participating John Hopkins University, McDaniel College, College of Notre Dame of Maryland, Goucher College, Loyola University in Maryland, Mount St. Mary’s University
  12. Side-by-Side Comparison
  13. Leverage your Assets Make your $ work for YOU Grow Assets, Not Liabilities Tax Advisor / Strategies Qualified Planner with Intricate Tax Knowledge
  14. Decisions…Decisions Planning too late vs. No planning Planning alone vs. Seeking professional Uncle Sam LOVES improper planning Which plans are right for me? What assets do I have to leverage? How much do Ineed? How do I get started?
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