Saturday, September
4 2010
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Saturday, September
4 2010
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Announcing a new acquisition!!
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What's New at Forte for the year 2007 June 2007 - Thinking About Private School for Your Kids? The Earlier You Start the Better By Forte News Department Considering
private grammar and high school is a parent’s first introduction to a lifetime
of saving for a child’s education. Depending
on where you live, you might face a decision to choose between private and
public schools, and there might not be much of a choice. It’s an expensive proposition made even more
complicated by the fact that you have to save for college at the same time. Some are able to pay for private school
today plus save for college. For others
they may have to plan on ‘paying as they go’ for all schooling – today and for
college. How do
parents make it work? Some have the money to make anything work, but for those
who don’t, it’s essential to plan from the time your child is very young. From
the beginning, keep abreast of every possible resource for scholarships,
discounts, loan programs and other forms of financial aid. It makes
sense to find a financial planner, such as a CERTIFIED FINANCIAL PLANNER™ professional, who can link a child’s
pre-college education planning to the financial planning necessary for college,
grad school and beyond. Here are some ideas to start with: How much? The National Association of
Independent Schools (NAIS), a national organization representing private
pre-schools, elementary and secondary schools, estimates that the median
tuition in 2006-07 for all grades of private day schools was $15,894. For boarding school, the price is almost
double. How much aid? A little more than 18 percent of
all private school students are receiving some form of aid at an average grant
of $10,871. Financial aid grants for private elementary and secondary schools
works roughly the same as college – they are awarded on the basis of need. Grants
are the best form of financial aid because they don’t have to be paid back. Applying for aid: Most schools use the Parents'
Financial Statement (PFS) from the School and Student
Service for Financial Aid (SSS). This is a service owned by NAIS
that helps schools determine how much a family can afford to pay for school
tuition and other educational expenses. If the school you are considering
does not use SSS, be sure to ask what steps you need to follow in order to
apply for assistance. The form considers how many children you’re paying
tuition for in K-12 or college and how high the cost of living is in your area.
Don’t forget to plan for retirement:
You’ll do anything
for your kids, but you have to pay yourself first. Talk to a financial planner
to see how much you’ll need in retirement and how much you’ll need to save
weekly to make that goal. Keep in mind that your greatest potential for a
successful retirement comes from starting savings early and you can’t forfeit
that in favor of your child’s education. Consider a Coverdell Account: This is not a universal
recommendation because some families may benefit more from savings plans
customized to their situation. Coverdell Education Savings Accounts – formerly
known as education IRAs – are trusts created to save money for a child’s
primary, secondary or college education. Contributions are relatively small --
$2,000 per beneficiary from all sources during the year – though there may be
exceptions for certain types of rollovers. Yet since Coverdell Education
Savings Accounts are considered the asset of the account owner, you may want to
keep it in your name since an account in the student’s name could adversely
affect financial aid eligibility. Enlist the grandparents: If your parents can afford to help,
they have several options to help you save for your child’s education without
triggering their gift tax obligation. First, each grandparent can give up to
$12,000 tax-free to each child or they can give money up to any amount directly
to the school without triggering the gift tax. Also, they can give up to $2,000
annually to a Coverdell account you’ve set up for the child. For college, they can also gift money to a
529 College Savings Plan or a Uniform Transfers to Minors Act (UTMA) account
for your child. Don’t use debt as a Band-Aid: Avoid the trap of being forced to
use debt while trying to “do it all.” Stay within your means. If you find yourself close to using your
debt options, enlist the help of a financial planner to talk through ways to
adjust your spending or find student aid. June 2007 — This column is produced by the Financial Planning Association,
the membership organization for the financial planning community, and is
provided by David W. Henion, a local member of FPA | ||||||||||||||
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