Education Planning
Prepare Today for Your Child’s College Tuition Costs
The cost of college tuition rises almost every year and can be a huge burden for families to handle. To help ensure your child can get the education necessary to have a successful career, it’s wise to include education planning in your overall financial plan. Here at LPL Financial - Dallas Grabow, we frequently help families develop a strategy for future college savings.
Most Popular Ways To Save for Tuition
There are several different approaches you can take to save up for your child’s education. Two of the most popular tax-advantaged ways to save for college are:
Coverdell Plans
These plans allow parents to count contributions as tax-deductible expenses. You can contribute up to $2,000 per year per child until your child reaches the age of 18. To qualify for this type of plan, your family must bring in less than $220,000 each year.
529 Plans
We consider 529 plans to be a great strategy for future tuition costs. They are tax-deductible plans and won’t require your kids to pay any taxes on them as long as the funds are used for qualifying tuition and other education costs.
Contact Us
If you want an alternative to these programs, just let us know. We can set you up with certificates of deposit accounts, traditional savings accounts and IRAs. Contact us today to learn more about our education planning services.
Frequently Asked Questions
Education planning helps families prepare for future education costs with a clear savings strategy, appropriate account types, and tax-aware funding. The goal is to reduce last-minute stress and make informed decisions that support your student’s goals and your broader financial plan.
It depends on your needs. Many families prefer 529 plans for tax-free growth on qualified expenses and potential state tax benefits. Coverdell ESAs have lower contribution limits but broader eligible expenses. Custodial (UTMA/UGMA) accounts offer flexibility, though assets become the child’s at adulthood and may affect aid differently. We’ll help you compare options for your situation.
529 plans allow after-tax contributions to grow tax-free when used for qualified education expenses like tuition, fees, books, and certain room and board. Some states offer deductions or credits for contributions. You can change beneficiaries among eligible family members, and unused amounts may have additional options subject to specific rules. We’ll help you choose and manage a plan that fits your goals.
We start with your target schools or programs, consider timelines and expected aid, and build a monthly or annual savings plan. We also coordinate with your overall financial picture so college funding doesn’t derail retirement or other priorities.
A smart plan considers all funding sources: savings, cash flow, scholarships/grants, and responsible borrowing if needed. We review how assets and income can affect need-based aid, discuss FAFSA timelines, and explore merit-based strategies to help make the most of available resources.
Many 529 plans cover a range of qualified expenses, which can include certain K–12 tuition amounts, vocational and trade programs, and other eligible education paths. Specific limits and state rules apply. We’ll help you understand what’s covered before you spend.
You can change the beneficiary to another eligible family member, keep funds for future education, or explore other options that may be available under current rules. We’ll walk you through the choices and potential tax implications so you can decide confidently.