Prepare Your Child (or grandchild) for College with this Four-Year Action Plan

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Published by Taylor Financial Group for Women

If your child (or grandchild) is starting high school this fall, now is the perfect time to start preparing yourself, and them, for college.  You may be thinking – do I really need four years to prepare?  I say “YES!”  There are tons of requirements and deadlines to think about and keep track of!  Not to mention the huge expense and financial planning that goes into it.  Trust me, I speak from experience.  I have one daughter who just finished her first year at Wellesley College, and another two children right behind her.  I’ve been planning for college for years and years, and the planning will continue for years to come.  I can tell you firsthand that it can quickly become overwhelming!

Recently, I came across an article by Putnam Investments that included a year-by-year guide outlining different things you should do to keep you and your child (or grandchild) on track with college preparation.  As I always tell my clients, I would never recommend something to them that I am not doing myself.  So, I’m sharing this “action plan” with you because I think it’s incredibly useful and I intend to use it too.  Click here to read Putnam Investment’s Four-Year Action Plan to Prepare for College.

Some key takeaways from Putnam’s Action Plan include:

·         Freshman Year – Increase saving in a 529 plan.  Encourage other family members to get involved.

·         Sophomore Year – Consider tax-smart strategies and the impact of income on federal financial aid (FAFSA).

·         Junior Year – Determine the Expected Family Contribution (EFC) for financial aid.  The EFC process factors income from the “prior prior” year.  Note that increases in income may affect aid (i.e. income from the sale of a stock or a Roth IRA conversion).

·         Senior Year – Complete the FAFSA form (between October 1st and June 30th) – the earlier the better, as money runs out.  Also, have students complete a health-care proxy when they turn 18 and before going to college, so that there are no issues for a parent and/or grandparent to obtain necessary medical information in case of an emergency.

Because there are so many different factors that can affect college savings, it’s a very good idea to meet with your financial advisor to make sure you’re doing everything you can to maximize college savings and benefits.

If you have any questions about planning or saving for college, give us a call.  We are happy to review and discuss your situation with you, and see if there is any way we can help.

 

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