Скачать или смотреть Avoid Student Debt: The Most Tax-Efficient Ways to Save for College

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Ultimate Guide to Education Savings | 529 Plans, ESAs, Roth IRAs & More
🎓 Want to save for your child’s education without breaking the bank?

You’re not alone! With college costs skyrocketing, the need for a smart savings strategy is more critical than ever. Over the last 40 years, tuition has increased by over 180%, making it feel like a ticking time bomb for many parents.

For example, Arizona State University (ASU) tuition was just $1,000 per year in 1980—today, it’s over $12,000 per year, and that’s just tuition! When you add in housing, books, fees, and living expenses, the total cost can quickly spiral out of control.

But don’t worry! In this video, I’m going to show you the best ways to start saving TODAY.

📢 Who is this video for?
✅ Parents looking to save for their child’s education
✅ Middle-class families who want tax-efficient savings strategies
✅ Parents with kids age 12 or below who have time to invest before college
✅ Anyone struggling to decide between 529 plans, ESAs, Roth IRAs, or other options

👋 Meet Your Host
Hi, I’m Grady Cool. I have a CFA, CFP, and MBA. I am the CEO of Cool Wealth Management. I’ll guide you through the best education savings options.

By the end of this video, you’ll know exactly how to start saving for your child’s future in the smartest way possible.

💰 Best Education Savings Accounts & Strategies
1️⃣ 529 Plans: The Most Popular Option
✅ Tax-free growth when used for qualified education expenses
✅ Some states offer tax deductions for contributions
✅ No federal contribution limits (huge advantage!)
✅ Funds are removed from your taxable estate, while you still control them

🚨 But beware of these limitations!
❌ Limited investment options
❌ Restrictions on K-12 expenses
❌ Penalties & taxes if the funds aren’t used for education

🔹 Real-Life Example: I had a client (let’s call him Mr. Baggins) whose grandparent set up a 529 Plan assuming he’d go to college. Instead, he chose to travel and explore. Now, he faces taxes and penalties just to access that money!

✅ Good news! The SECURE Act 2.0 (2024) added new ways to transfer 529 funds without penalties. Planning ahead is key!

2️⃣ Coverdell Education Savings Accounts (ESAs): More Flexibility, But Limits Apply
✅ Tax-free growth (just like a 529)
✅ More investment choices – including stocks, bonds, and even real estate
✅ Can be used for K-12 education and college expenses

🚨 Cons of Coverdell ESAs:
❌ $2,000 annual contribution limit per beneficiary
❌ Income limits apply – high earners may not qualify
❌ Funds must be used by age 30, or taxes and penalties apply

📌 Who Should Consider This? If you want more investment flexibility and can stay within the income limits, this can be a great alternative to a 529!

3️⃣ Roth IRAs for Education: A Backup Plan?
✅ Penalty-free withdrawals for education expenses
✅ Funds not counted as much in financial aid calculations
✅ Allows for retirement AND education savings flexibility

🚨 The Downsides?
❌ Still taxed on earnings if used for education
❌ Not as tax-efficient as a 529 or ESA
❌ Withdrawals reduce retirement savings

📌 Bottom Line? A Roth IRA can be an option, but it’s not the best primary choice for college savings.

4️⃣ Custodial Accounts (UGMA/UTMA): What You Need to Know
✅ Money is held in the child’s name but controlled by parents
✅ Can be used for any expense – not just education
✅ Provides financial independence for children

🚨 BUT...
❌ Money legally belongs to the child once they reach adulthood
❌ Can reduce financial aid eligibility
❌ Not as tax-efficient as 529s or ESAs

📌 Who Should Consider This? If you want to give your child financial control, this might be an option. But be careful of financial aid impacts!

🎓 Scholarships, Grants & Loans: Free Money You Shouldn’t Ignore!
✅ Millions of dollars go unclaimed each year
✅ Scholarships for academics, sports, niche interests, and even health conditions

💡 Pro Tip: The weirder the scholarship, the better the odds of winning!
✔️ Scholarships based on race, ethnicity, disabilities, or even unique talents
✔️ Many people don’t realize you can apply for scholarships even while in college!

📌 Real-Life Example: I had a college friend who saved tens of thousands of dollars by applying for scholarships while already enrolled. Most students don’t know this is even an option!

🎯 Money-Saving Tips for College
✅ Investments can keep growing while your child is in school
✅ Apply for financial aid and scholarships every year – not just before college
✅ Look for jobs that provide free housing or meals
🔹 Personal Example: I worked as a Community Assistant (RA) and didn’t pay for food or housing for 2.5 years – a massive savings!

Chapters:
00:00 Why It Matters?
01:00 Perspective
01:41 529
06:00 Coverdell Education Savings Account
09:04 Roth IRA
09:40 Custodial Accounts
10:16 Scholarships