మీ బిడ్డను ఎల్లప్పుడు కాపాడుకోవాలి అంటే ఈ 5 పద్ధతులు పాటించండి   5 Ways To Save For Your Child     2017-04-21   21:24:45  IST  Raghu V

Whenever we talk about college education, the primary concern of ours is mostly related to finance, when we can never ignore the fact that the cost of teaching is shooting day by day. But if planned properly you won’t receive a shock when your son or daughter will receive the coveted acceptance letter. At the first place, you have to determine, when the college education of your child is going to start and then calculate the cost of education today and how much it is expected to increase in the next few years. Then try estimating the number of years you will pay for and start saving each month. According to the college pricing 2016 reports, the average cost of tuition fees reached up to $30,400 at the private institutions and $10,000 for in state residents and public universities.
Here is a list of few tips and plans for saving money for your child’s education in the USA.

Probably one of the most popular ways for saving money is through college savings plans. The 529 college saving plan allows parents to save money in a tax-free manner and via a variety of investment options providing huge tax advantages. The amount saved in these accounts can only be used for undergraduate and graduate studies for a two or four years programme in the USA. An advantage of this particular plan being the parent, the key account owner can change the name of the beneficiary if his child says that he doesn’t want to go to college.

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#Prepaid tuition Plan

Probably one of the best alternatives to 529 college plans, it is basically designed for parents who are sure that their child is going to attend in-state public universities. Prepaid tuition plans retains the same plans that in case of a 529 plan from the same tax and financial protection whereas the limitation to the prepaid plan is that, if the child decides to go to any other colleges outside the state, then this plan will return the money but the full value of the plan cannot be experienced.
Same as the popular 529 plan, the prepaid tuition plan holders can change the name of beneficiaries at any time, but they may have to pay the penalty and income tax on funds in case the program is used for anything else, other than college fees.

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#Roth IRA Plan

Through this financial aid, parents can give their child a kick start, by opening a Roth IRA account once their child begins earning money. Once the child gets to the legal age of 18, he/she can retain control over the account. However, there is certain limitation to this plan in case of withdraws due to certain circumstances or for any other type of spending.

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#UGMA and UTMA Plans

UGMA and UTMA accounts provide a standard tax break for children’s under 18. If your child doesn’t want to attend college, this program can be beneficial as there isn’t any risk of losing your financial aid.
The tax procedures in these accounts are as follows- The first $1000 is tax-free and the second $1000 is taxed at the Childs IT rate, and the leftover is taxed at the parent’s income tax rate.

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Well talking about the downside, the parents have very less control over how their child uses the funds and to be frank, there isn’t any legal way to prevent the child from using the money in a not to such a good manner.
Maybe at times, the dream of a college education for your children is just not within your reach, but following and investing in the above few plans can really be helpful at times, and thus you can reduce your stress levels without thinking of your bank debts.

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