Planning for Your Child’s Future

In today’s world, supporting a child’s education is a rewarding aspect of success and a crucial element of any comprehensive financial plan. With the ever-increasing costs of education compounded by rising inflation, it’s essential to start planning early for your child’s educational expenses. At J. Blum & Associates Wealth Management, we are dedicated to helping you explore and choose the best investment vehicles and tax-efficient strategies to fund a future filled with learning and opportunities.

One of the most effective tools for educational planning is the 529 College Savings Plan. Investing in this plan means more than just covering tuition costs; it’s about inspiring a legacy of education that could benefit generations. The contributions to a 529 plan grow tax-deferred and can be withdrawn tax-free when used for qualified education expenses like tuition and room and board. Together, we can select an investment strategy that suits your financial goals and benefits from generous contribution limits, regardless of your income level.

While not specifically designed for college savings, UGMA (Uniform Gifts to Minors Act) and UTMA (Uniform Transfers to Minors Act) accounts offer flexible options for building a financial foundation for your children. These accounts provide multiple investment choices and some tax advantages. One key feature is the ability to transfer assets to your children without setting up a costly trust. However, it’s important to note that contributions are irrevocable, and control over the funds is transferred to the child when they reach the age of majority, which varies by state.

Our experienced team at J. Blum & Associates Wealth Management is here to help you navigate the complexities of these investment options. We provide personalized guidance to help ensure you understand the tax benefits, ownership structures, risk, and contribution limits of each option. Moreover, should your child earn a scholarship, we’ll assist you in making informed decisions about any leftover education funds to avoid potential penalties. Planning for your child’s future requires more than just savings; it requires strategic planning and an understanding of the available financial tools.

The foregoing material is for information purposes only and does not purport to be a complete description of the material referenced herein, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but there is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Any opinions are those of J. Blum & Associates Wealth Management and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. There is no assurance that any investment strategy will be successful. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

A custodial account may also have a negative impact on the child’s eligibility for financial aid. Custodial accounts are strictly governed by state law. The opportunity to customize the account does not exist as it does with a trust. The donor cannot direct assets in the event of the child’s death or impose restrictions on account uses post-account termination.

529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.

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