Would you like to help a special child in your life prepare for the rising costs of education?
With all of the demands and decisions that new parents face, one important consideration is often unintentionally overlooked in those early stages of college. However, with tuition rates rising, it should be at the top of every parents’ and grandparents’ planning list no matter the child’s age. Over time, even small, routine contributions can grow to provide a significant portion of the child’s educational expenses.
Planning Can Begin at Any Age
Although it is best to start the college investment process when your child is young, it is never too late to begin; however, by starting early, you may be able to invest less money now, and thanks to the potential impact of compounding interest, let your savings do much of the work for you. Even if your child is already in high school, there are still options available. While you may need to invest more money in a shorter amount of time, you could be able to afford at least a portion of costs. A benefit to investing at this stage is the ability to talk to the child about his or her specific goals. Which schools is he or she interested in attending? Is an option like vocational school more preferred? Are there any sports or extracurricular activities that could provide the child with a scholarship?
All of these questions can help lead towards the bigger picture – how much money should be saved?
Utilize an Educational Plan as a Gift-Giving Option
With the flexibility and convenience of today’s savings plans, many types can allow for grandparents, aunts and uncles, and other family and friends to contribute. As long as the gifting amount does not exceed $14,000 during one calendar year, the contributing individuals will not need to pay a gift tax and the funds can still remain in their control. This means that if the child receives a full-tuition scholarship or decides not to attend college, the funds can be transferred to another child or, if desired, returned to the contributor.
Learn About Funding Alternatives for Special Needs Children
Conquering the financial challenges of having a special needs child can be overwhelming. For example, it is estimated that it will cost around $3.2 million to take care of a child with autism over his or her lifetime. However, placing assets in the child’s name for future expenses can sometimes cause more harm than good. Listing the child as a beneficiary or account holder can create situations where the child becomes disqualified from receiving government benefits. In these situations, having a knowledgeable and dedicated financial advisor is important.