Investing for children & college savings
What is a 529 Plan or a UTMA Custodial Account?
At Lang Investment Services, we provide you with the tools to navigate the variables of college savings effectively. Our team collaborates with you and your child to help you provide an enriching learning experience for them.
When considering the value of investing in college, it’s essential to reflect on your child’s future and the costs associated with not pursuing higher education. While it may be tempting to Google “What is a 529 plan?” or “What is a UTMA custodial account?”, that will do little to build a strategy around your college savings aspirations. Our team is enthusiastic about guiding you and your child along their educational journey.
We offer the following college tuition investment options:
529 Scholar’s Choice Plan: This plan provides tax advantages when used for paying qualified educational expenses. The best 529 plans offer multiple college savings investment options and perform much like a Roth 401k or Roth IRA by investing after-tax contributions into your student’s account.
529 account values will fluctuate in value depending on how the investments perform. 529 plans allow any one donor or custodian to make contribution(s) into the child’s account.
UTMA Custodial Account: UTMA accounts are controlled by parents (or other adult relatives), which allow you to transfer assets to a minor without the need to establish a trust.
The financial flexibility on a UTMA Custodial Account is a definite upside. However, if your student expects to rely on other sources of financial aid, a UTMA custodial account can have a negative impact as the government views the funds as assets for the child—these accounts could knock 20 percent off available financial aid.
Planning for college tuition investing:
The rising cost of college tuition can be a daunting prospect, but investing in your children’s educational future remains a valuable endeavor. In making this decision, it is essential to consider several variables:
Return on investment: Will the education your child receives lead to sufficient post-graduation earnings to justify the investment?
Financial aid and scholarships: Will the plan impact your child’s opportunities to secure financial aid and scholarships?
Cost of living: Will the plan account for your child’s living expenses in the area where their college is situated?
Career aspirations: Does the plan account for your child’s career goals and the education required to achieve those aspirations?
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