Education Planning

Education Planning in Fresno, CA - Can You Afford College?

With the US student loan debt at an all time national high and with interest rates going up college may seem like a big what if for many Americans. As financial advisors in FRESNO, CA our first priority is helping you take care of yourself and your educational goals. We want to learn more about your personal situation, identify your dreams and undergraduate or graduate goals. College planning involves many facets including potential student loans, grants, private pay and the potential use of various funding techniques. Working with a financial advisor can help you evaluate all of your available options. Whether you are young parents just starting a savings account for your child or your a grandparent assisting a grandchild save for future education or if your a young adult self funding your education, our Fresno, CA financial advisors will help you assess your options and design a strategy for your educational needs. 

College Planning Services

The financial advisors at Kerr Wealth Management can help you: 

  • Determine if you are eligible for financial aid.
  • Determine your approximate financial aid award.
  • Determine if the future cost of loan pay back is worth taking financial aid.
  • Understand various funding options available for college tuition. Prepaid plans, 529 college plans, 401(k) or IRA, life insurance, coverdell and gifting strategies.
  • Determine an optimal tax strategy and funding account.
  • Determine future costs of college.
  • The potential good and bad of gifting strategies.

What is a 529 College Savings Plan?

A 529 plan is a qualified savings plan that can help pay for your child's college education and related expenses at thousands of eligible educational institutions and universities. 

Ownership and Control

As the account owner you can control when and how the funds are used and invested in the 529 account. 

Tax Savings

529 plan earnings are deferred from federal taxes and usually state taxes. You also wont be taxed when you use the funds for qualified higher education expenses.

Lower Financial Aid 

By setting up a 529 plan for your dependent child, the savings in a 529 plan will have a lower impact on financial aid compared to your savings or other investments that could be in your child's name.

Can You Use a 401(k) or IRA for College Funding?

Yes. College tuition and related educational expenses can be paid for with an IRA or 401(K). It is important to note that when you are considering using funds from a 401(K), you should always refer to your plan document to verify if there is a loan provision. Using a 401(K) can be a prudent use of retirement funds assuming you have enough time before your retirement and if you think you can pay back your 401(K) within 5 years. The cool thing about using your 401(K) - the loan comes from you, not a bank. An IRA can also be a valuable educational funding tool because you are using your money and although you are not paying interest - you may still have to pay income taxes on your withdrawal. How about your ROTH IRA? Sure. If after 5 years of having your ROTH IRA you could consider using your ROTH IRA for a tax free distribution.

Can You Use Life Insurance for College Tuition?

Yes. In fact life insurance can be a viable option because the cash value in the policy may not  not count against your assessable assets during a Financial Aid evaluation. In our opinion, life insurance policies are not the cheapest or may not be the best investment option however, for the purposes of Financial Aid it is one asset class worth considering. With various gifting techniques a life insurance policy could be a suitable weapon in your college planning arsenal. 

*we are not tax professionals and you should consider consulting with a CPA or tax expert regarding the tax impact IRA withdrawals may have. Kerr Wealth Management charges an hourly or fixed fee to evaluate and design a portfolio for 529 plans and we do not charge asset management fees for opening 529 plan accounts.

Fund charges and trading charges may apply. 

Start Your Education Planning Today

Thank you! Oops!