Saving for college is challenging, but you have some excellent options. When you save for college, knowledge is power. The key is to identify the college funding options that are best for you. Here are some proven suggestions.
- 529 College Savings Plan. College planning becomes easier and cost effective with a 529 educational savings account. Two features are primarily important: You can contribute up to your state maximum per year. Equally important, your earnings will grow tax-free.
- Coverdell Education Savings Account. You can use these accounts for your child’s qualified expenses from elementary school through high school, as well as college, giving you flexibility. You can contribute up to $2,000 per year. Your account earnings increase tax-free and you can make withdrawals for qualified expenses without being taxed by the federal government.
- Gerber Life College Plan. You choose your monthly payment, as little as $1.00 per day, to fund these college savings plans. You’ll receive a guaranteed payment at maturity and receive adult life insurance protection should something happen to you before maturity—your child will still receive the full benefit amount.
- An effective investment account. Although your earnings are taxed, you’ll enjoy total control of your funds, as there are no income restrictions or contribution limits. You also have total freedom to make withdrawals at any time and in the amounts you choose.
- Roth IRA. While this IRA is structured as a personal retirement account, it offers the option of withdrawals for education. Should your child get a full scholarship or decide not to attend college, your retirement fund remains strong and growing.