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Planning and Saving to Send Your Kids to College

Life Stages Blog Post Five

Despite what anyone says, receiving a college education is important. It’s true that it’s not necessary to go to college to land a fulfilling and well-paying job after high school, but many people do get a degree and go on to pursue a lucrative career in their chosen field of study.

Unfortunately, pursuing a higher education comes at a price. The reality is that college isn’t cheap and what’s worse is that tuition rates are continuing to skyrocket with little to no sign of slowing down. As such, it’s imperative to begin planning — and saving — for your child’s education when they’re at a young age. Should your kid decide not to go to college, you’ll have funds that you can use for anything of your choosing, so saving and planning for college is a win either way!

Trust Our Community Bank to Help

It’s not always easy to financially account for your kid’s college education, and that’s why the friendly team at Commerce Bank of Wyoming is here to help. Your money matters are, quite literally, our business, and we’re more than prepared to help you with the financial ins and outs of your life. It’s all part of our dedication to the financial well-being of the Rock Springs community!

Read below as we continue our multi-part blog series on navigating the finances of major life milestones, and feel free to get in touch with us at any point if you have any questions.

Personal Savings Vehicles

There’s no magic solution to affording college. We’ll touch on the importance of landing a scholarship below, but affording college really just comes down to saving money. The sooner you begin saving for your child’s future education — whether or not he or she chooses to accept it — the better.

Opening up an additional personal savings account with us offers a flexible savings solution in which you won’t be penalized should you decide to withdraw funds that aren’t for “qualified” education-related expenses. So, again, should your child decide that a traditional four-year college isn’t the right post-high school avenue for them, you’ll have no trouble utilizing your saved money for other things in life.

A Qualified Tuition Program (QTP) like a 529 plan allows you to save and withdraw funds tax-free so long as they’re used for qualified education expenses such as books. You might decide to wait until your child is a little bit older before getting money aside into such a plan to ensure that they’re intent on going to college.

Saving Via a Roth IRA Tax-Advantaged Retirement Savings Account

It’s true that Roth IRAs are traditionally used to save for retirement, but you don’t have to limit your savings solely for retirement with a Roth IRA. Like a 529 savings plan, you can contribute funds and eventually withdraw them completely tax-free and penalty-free. However, unlike a 529, you can freely withdraw funds to use for whatever your heart desires: home renovations, a down payment on a new vehicle, and so forth. In other words, there’s more flexibility with a Roth IRA in terms of withdrawal.

However, do keep in mind that there are certain income limits and contribution limits associated with a Roth IRA. To learn more about the details, our community bank in Rock Springs is just one call or click away.

Coverdell Education Savings Accounts

This tax-advantaged savings account is a great way to go because it’s similar to a traditional 529, but more flexible. The flexibility in this savings vehicle lies in what’s considered a “qualifying” educational expense, such as financing a private K-12 school as opposed to a public university. If you are intent on sending your child or children to private school once they’re of age, this is an ideal savings vehicle to utilize. Note that, like a Roth IRA, there are income and contribution limits to consider.

Commerce Bank of Wyoming Is Here By Your Side

Our Community Bank encourages you to research various college savings vehicles to the best of your ability, but ultimately, we’ll help make sure that you’re putting your hard-earned money where it matters the most. Helping the Rock Springs community grow is not only our job, but our passion.

Plan for financial success with Commerce Bank of Wyoming today.

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