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Education Planning

Planning for college is an investment in your family’s future—but doing it on your own can be an intimidating task. At Geier Asset Management, we can help you by conducting an analysis of your finances and running projections to determine how much money you will need to fund a college education for your children. Based on these projections, we will help you decide which funding scenario is the best for your situation—be it a lump sum or monthly contribution. Your potential education planning plans include:

Section 529 College Saving Plans

Section 529 plans offer tax-free growth if the funds are used towards post-secondary education—including tuition, room and board, supplies, etc.—and they are able to be passed from generation to generation if the funds go unused. There are potential state income tax deductions for the account holder, and section 529 plans can reduce the holder’s taxable estate. Anyone can contribute money on behalf of a beneficiary including relatives, friends, or even colleagues. The favorable gift tax treatment of 529 plans makes them a good estate planning tool.

Prepaid College Trusts

A prepaid college trust will lock in future college tuition prices at today’s rates and can only be used for tuition. These plans offer a potential state income tax deduction for the account holder. If the student attends an in-state public college, the plan pays the tuition and required fees. If attending a private or out-of-state college, the plan typically pays the average of in-state public college tuition, and then the family will have to pay the rest. These plans involve no risk to the principal and are often guaranteed by faith and credit of the state.

Uniform Transfers to Minors Act (UTMAs)

UTMAs are brokerage accounts for children under the age of  majority (18 or 21).  This type of account allows donor’s to transfer income producing assets to children, who typically are in lower tax brackets. They provide a vehicle for gifts to be given to a minor, but are subject to the annual gift tax exemption limits. UTMAs are inexpensive to operate and offer increased flexibility for the account holder.   While not specifically designed to finance a college education, many investors use UTMA’s for this because the funds become available to the child at age 18 or 21 and are more tax efficient along the way.

When you choose Geier Asset Management to handle your college planning, we will help you through every step of the process to ensure success. We’ll determine which investment vehicle is most appropriate for your specific needs and complete the application process. Once the college fund has been established, we will invest the contributions and manage them regularly.

guide to saving for college

How Geier Asset Management Assists in the College Planning Process

College planning is a significant component of the financial planning process. While the 529 plan is our preferred savings mechanism, there are many other things to consider when planning for college:

  • How much should I contribute monthly to reach my goal?
  • How should I allocate the funds?
  • Should I make adjustments regularly, and if so, how will I know what to do?

These are some of the questions that we address in our college planning analysis. Projections are run based on factors such as current cost of college, inflation rates on tuition, and estimated rates of return. From there, our financial planning advisors will devise a plan that will identify the amount required and the estimated return needed to achieve your college funding goals. We’ll actively manage the 529 accounts for our clients, making regular adjustments based on current market conditions and the time horizon until the funds are needed. College planning is crucial for the long-term success of your loved ones. We are happy to handle the strategic planning and investment management, while utilizing the best college savings account available: the 529 plan.

Choose Geier As Your Howard County Education Planning Advisor

Planning for college has become one of the most common financial planning topics for our clients. We assist in building a projection to determine how much they will need to contribute monthly, annually, or as a one-time lump sum. In addition, we will aid in the investment management of their college accounts to ensure maximum tax-free growth of the funds. Automatic monthly contributions from a checking account to a 529 plan have become very common for parents. This allows parents to consistently hit their contribution targets in a streamlined manner.

College costs can’t continue to skyrocket as they have over the years. But the cost of an education will always be a major budget item for most parents. Start planning now—our financial planning advisors can help! Contact Geier Asset Management today.

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