529 Plan Mount Laurel New Jersey
Kids grow quickly! It’s not long before they’re headed off to college, buying their first house and getting married. One of the best things you can do for your child is to start saving for their future. Not only will they have financial stability when they’re starting out, but also you can instill healthy habits from the start. After all, the sooner people start saving for retirement, the faster and easier it is to build wealth and a tax free retirement in New Jersey.
Rethinking 529 Plans in New Jersey: Are They the Best Option for Your Family?
Since their debut in 1996, 529 savings plans have been one of the most popular ways to cover college costs. And it’s understandable why. These tax-advantaged plans make it easy to save for college expenses such as room and board, college tuition, fees, computers and more. They also cover K-12 education and up to $10,000 in student loan debt.
That said, 529 plans aren’t your only option for funding your child’s education. Not to mention, these plans are not as flexible as other accounts because you can only make tax- and penalty-free withdrawals for educational costs. If you want a more flexible savings plan that can be used for more than college expenses, there are other options that may suit your family better.
Assessing the Pros and Cons to 529 Plans
Before we cover some of the other ways to save for your child’s future, let’s cover the pros and cons to 529 plans in New Jersey. At Leonard Financial Solutions, we want our clients to be properly informed on all of their options. We want what’s best for you!
Advantages of 529 Savings Plans
Disadvantages of 529 Savings Plans
Whole Life Insurance as an Alternative to 529 Savings Plans
There are several different alternatives to 529 plans (i.e., custodial accounts, trust funds), but the one we’re going to focus on today is whole life insurance in New Jersey. At Leonard Financial Solutions, we feel this is the best way to secure your child’s financial future while having more control and flexibility over how you spend the money.
Whole life insurance is a type of permanent life insurance. It includes a savings account - called a cash value - that grows over time. Once your child reaches adulthood, you can transfer ownership of the policy into their name. The cash value that adds up in a whole life insurance policy can be taken out at any time and is always tax free.
Here are the reasons why the top financial advisors in NJ recommend whole life insurance as a savings tool for college and other expenses:
Whole Life Insurance in NJ Makes Saving for the Future Easy
529 savings plans work for some families but not for all. If you’re unsure about signing up for a 529 plan, consider other options like whole life insurance. Leonard Financial Solutions will walk you through these policies, how much it will cost each month and what your child’s future will look like.
Our clients are typically surprised to see how much cash value they can build over time. They also appreciate the fact that their child can use these savings for more than educational expenses without penalty. Contact our financial advisors in NJ today and ask about our College Planning 101 session as well as obtaining free insurance quotes.
Rethinking 529 Plans in New Jersey: Are They the Best Option for Your Family?
Since their debut in 1996, 529 savings plans have been one of the most popular ways to cover college costs. And it’s understandable why. These tax-advantaged plans make it easy to save for college expenses such as room and board, college tuition, fees, computers and more. They also cover K-12 education and up to $10,000 in student loan debt.
That said, 529 plans aren’t your only option for funding your child’s education. Not to mention, these plans are not as flexible as other accounts because you can only make tax- and penalty-free withdrawals for educational costs. If you want a more flexible savings plan that can be used for more than college expenses, there are other options that may suit your family better.
Assessing the Pros and Cons to 529 Plans
Before we cover some of the other ways to save for your child’s future, let’s cover the pros and cons to 529 plans in New Jersey. At Leonard Financial Solutions, we want our clients to be properly informed on all of their options. We want what’s best for you!
Advantages of 529 Savings Plans
- Contribute regularly and watch your savings grow
- Contributions grow with the stock market
- No federal or state taxes (in most cases) as long as your child uses the money for educational costs
- Applies towards most educational expenses - books, tuition, room and board, computer equipment, etc.
- Change the beneficiary without penalty
Disadvantages of 529 Savings Plans
- Could affect your ability to access federal aid (your 529 plan will be considered as part of your family’s overall financial picture)
- Penalties for noneducational withdrawals (usually around 10 percent)
- Penalties for ill-timed withdrawals
- Any income you withdraw for noneducational expenses is considered income, which means you’ll be taxed on it
- Less say over your investments - most plans only allow you to change your allocations twice a year
Whole Life Insurance as an Alternative to 529 Savings Plans
There are several different alternatives to 529 plans (i.e., custodial accounts, trust funds), but the one we’re going to focus on today is whole life insurance in New Jersey. At Leonard Financial Solutions, we feel this is the best way to secure your child’s financial future while having more control and flexibility over how you spend the money.
Whole life insurance is a type of permanent life insurance. It includes a savings account - called a cash value - that grows over time. Once your child reaches adulthood, you can transfer ownership of the policy into their name. The cash value that adds up in a whole life insurance policy can be taken out at any time and is always tax free.
Here are the reasons why the top financial advisors in NJ recommend whole life insurance as a savings tool for college and other expenses:
- Cash value grows over time. Every time you pay your premium, the life insurance companies in NJ set aside a small amount to put into savings. The sooner you start this policy, the more cash value it will grow.
- Access your cash value without penalty. Unlike a 529 plan, you can access your cash value at any time - and it’s tax free money. Your premiums must be paid, however.
- Lifelong insurance protection for unexpected events. Whole life insurance offers protection for as long as you have the policy. As long as premiums are paid, the beneficiary of the policy will receive the benefit.
- Affordable premiums. Life insurance policies are cheapest when you’re young and healthy. You can lock in affordable premiums while your child is young, and they won’t increase for as long as you own the policy.
- Does not count as an asset when you apply for college. 529 college savings plans are included in your overall financial picture, which can negatively affect your ability to get financial aid. Whole life insurance does not count towards this, allowing you to get more financial help depending on your family’s financial well-being.
Whole Life Insurance in NJ Makes Saving for the Future Easy
529 savings plans work for some families but not for all. If you’re unsure about signing up for a 529 plan, consider other options like whole life insurance. Leonard Financial Solutions will walk you through these policies, how much it will cost each month and what your child’s future will look like.
Our clients are typically surprised to see how much cash value they can build over time. They also appreciate the fact that their child can use these savings for more than educational expenses without penalty. Contact our financial advisors in NJ today and ask about our College Planning 101 session as well as obtaining free insurance quotes.
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