Developing a plan for meeting education expenses is a key priority for many CCM clients.
Providing funding support for a child’s education is among the most important financial commitments most parents will make. It is also an increasingly significant financial commitment. For most families, developing a plan for meeting education expenses is a key priority. While such a plan involves various elements such as gathering hypothetical tuition information, selecting investments, and evaluating lump sum funding, the development of a plan begins with establishing goals. Our firm has more than two decades of experience designing custom education plans to help families meet their goals.
The cost of providing a higher education is soaring. At present, students can expect to spend between $70,000 and $200,000 for an undergraduate degree, depending on whether they opt for a public or private college. Looking ahead, the College Board* recommends assuming an annual 5% college cost inflation rate, so for 2024, the range of $70,000 to $200,000 for a four-year degree almost doubles. These numbers make it so that far fewer families are able to fund educational expenses through cash flow.
One effective tool utilized for education funding is the 529 plan. This plan is named after Section 529 of the Internal Revenue Code created by Congress in 1996 – an important Code that in short, offers families a simple, tax-efficient way to save for higher education. As a result of going through an education planning review, many CCM clients have opened 529 accounts for their children and/or grandchildren. Assuming distributions are used for qualifying educational expenses, 529 plans allow one to save for educational expenses in a vehicle that is tax-free of all portfolio investment growth and earnings.
Utah Education Savings Plan
After a thorough analysis of all available educational 529 savings plan options, CCM has chosen to partner with the Utah Education Savings Plan (UESP) to create a customized investment experience. We selected this option based on the high quality of the holdings and the overall strength of the plan. The UESP is one of only four 529 plans in the country to receive the prestigious Gold rating from industry leading research firm Morningstar in 2014. It is the fourth consecutive year that the UESP has received the award and is a testament to their focus on a low-cost, high quality approach.
With their broad menu of investment options and ability to customize globally diversified portfolios that remain constant or adjust through time–based on the age of the beneficiary, in partnering with UESP we are able to deliver the kind of quality in an investment experience to our youngest clients as we do to all.
*www.collegeboard.com