In the Virgin Islands, parents are hopeful that their children will attend college and start a promising career. However, the cost of a college education is often overwhelming and reduces access for some children. A financial advisor explains several strategies for paying for a college education.
Starting a Whole Life Insurance Policy
Parents that start a whole life insurance policy for their child at birth could accumulate enough benefits to pay for a college education. The terms of the policy and its projected payout give parents further insight into how to plan for their child’s education.
Starting Advance Tuition Payments to a Preferred College
Parents who don’t have extensive budgetary constraints consider the benefits of advanced payments to their preferred college. The arrangement could help the parent save thousands of dollars in the long run. By setting up the option, the parent could avoid paying a higher amount in the future as tuition costs begin to increase.
Setting up a College Fund
A 529 college fund allows parents to make contributions to the fund tax-free. The contributions are deducted from the parent’s wages before taxes are applied and deposited into the account. Any restrictions for the specific plan are outlined in the documentation. Typically, there are restrictions for how much a parent can deposit within a given year. When the child withdraws the funds, they are responsible for any tax implications.
Creating a Trust Fund for Heirs
A trust fund is another effective and advantageous way to save for college. There aren’t any restrictions on trust funds, and the estate owner can deposit any value at any time. They might pay taxes upfront for the deposits according to how the estate owner contributes to the account. Stipulations are applied to control how much money is withdrawn and how it is used.
In the Virgin Islands, parents create a new plan for paying college tuition. Each opportunity could bring their child closer to the career of their dreams. When reviewing the options, it is urgent for the parent to consider tax implications and restrictions that apply to the accounts. Parents who want to learn more about saving for college contact Kirk Chewning now.