Education Planning

Through our InSight-Full® plan our clients enjoy providing education funding you their children and future generations as cost and tax efficient as possible. Using Traditional IRAs, Roth IRAs, 529 Plans, Life Insurance, Coverdell ESA, or other savings vehicles and methods, we want to make sure our clients know all of their options and which is the best fit into their plan.  While most savings vehicles grow tax deferred or free, others can potentially provide tax incentives.  Clients that go through the InSight-Full® planning process discover new options and reveal how each one can have an impact both now and the future on your plan before making a decision. 

Unfortunately, the cost of tuition has increased dramatically over the past handful of years at about a 5-6% rate of inflation.  This is terrible news for all those that recently graduated or about to graduate and for all those that have children or are looking to soon.  The average parent is being placed in a very difficult situation with making sure they support themselves financially but also ensuring their kids aren’t faced with a massive debt burden in the early stages of their careers. In order to fully understand this, our clients first must understand what they need to accomplish for themselves first. 

Client’s that work with InSight fund their kids’ education before their retirement, or were trying to do both when they didn’t have nearly enough to support themselves in life after employment. Fortunately for kids they can take a loan for school but there are no loans when you’re retired. Without knowing how much you need for yourself you cannot plan for someone else. Supporting our loved ones is obviously important but not at your expense. The last thing you want is the money you set aside for your kids for college and not yourself puts you in a place where your kids have to stop their dreams in order to supplement your income and lifestyle.  

Luckily, there is not just one way to save for education. In the beautiful state of Colorado, there are incentives to use 529 plans instead of other vehicles so it’s hard to pass those up, but that doesn’t necessarily mean you have to use them. However, for those that itemize their taxes, using a 529 plan can be a great way to reduce your state income taxes with Colorado’s dollar for dollar deduction incentive plan. If you are in a lower income bracket and are having kids a little later in life, utilizing a Roth IRA may be a great vehicle if your kids won’t be 18 until your 59 and a half.  If you don’t have a lot of income and you don’t itemize using a Coverdell ESA might be the path for you.  If you’re the primary breadwinner, you have a large amount of debt, or your family wouldn’t be able to sustain a certain lifestyle that you wanted them to have if you passed, life insurance with a cash value may be an option for you.

Regardless of your situation, each of our clients are given the opportunity to use any method they want and know the best option for them when they start their plan after going through the InSight-Full® Planning process.

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