College Planning

College planning is an essential part of family financial planning.  Most people understand the importance of saving for a child's education well in advance however the vast majority end up saving very little by the time the child reaches the matriculation date.  

Parents find themselves having to cut back on living expenses, borrow money, tap into retirement assets, or seek additional employment to meet the funding requirements of a college education.

What Will College Cost?

The current cost of a four year degree from a private university is roughly $133,000*. To send your child to a public college to obtain a four year degree would cost approximately $64,000*.

Saving for college poses another challenge to families. The cost of college tuition rises at a super inflationary rate each year. Currently the average cost of tuition is rising annually at a rate of 7.8%*.  

This means that in order for families to stand a chance in meeting the funding requirements they need to start saving early and get as many tax advantages as possible. 

Consider an Index Universal Life Plan

Index Universal Life Plans have become an increasingly popular way to save for a child's education because of their tax favored withdrawals from the cash accumulation value.

Here are some of the advantages of saving for college in an Index Universal Life Plan:

	Earnings grow tax-deferred.
	Your money is safe and protected.
	Your child is guaranteed to go to school in the event of tragedy even if you havn’t accumulated enough cash value yet because s/he is protected by the death benefit.
	Withdrawals are tax free because they are considered a loan against the cash value vs. an actual withdrawal.  (This is a loophole in the tax system that cost lawyers a lot of money to create.)
	There are no income restrictions.
	Contribution limits can be high relative to the death benefit.
	You retain the right to determine how the cash value is used. (If the child doesn’t go to college you can leave the cash accumulating for retirement.)
	Initial minimum savings amount is low.

If you would like Family Protection Group to take a look at your college plan and share our professional perspective on the latest college planning strategies then click below. 

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