Keeping Your Promises: Saving for College with 529 Plans and Upromise
A college degree has never been more important. In fact, students who obtain one earn an additional $1 million in income over their lifetime, on average, according to a 2001 College Board Study. But paying for that degree gets tougher every year. Tuition costs have grown at twice the rate of inflation over the past 15 years (Stiglitz & Tyson, 2000). Many gay and lesbian parents take second jobs, work overtime, or mortgage their retirement to cover college costs. Meanwhile, according to the College Board, many students graduate with more than twice the debt they did five years ago.
Despite these facts, there is a solution for GLBT families: plan early, save regularly and invest wisely. Don’t let sky-high estimates of what a top private college may cost in 2020 keep you from taking action today. Even modest savings can make a difference.
Options for All Gay and Lesbian Parents: Early Planners or Late Starters
Whether your child is in diapers or is already borrowing the family car, you and your partner will want to prepare a college funding strategy. A NYLIFE Securities Inc. Registered Representative can help GLBT families prepare for the future, including planning for college expenses. Permanent life insurance products, such as whole life and universal life, can help ensure that funds will be available to pay for your child’s education in the unfortunate event of the death of you or your partner. In addition to death benefit protection, these policies can also provide cash value accumulation, which, if the full death benefit is no longer needed, can be accessed via policy loans. New York Life and its subsidiaries offer a variety of insurance products that can help you ensure your family’s financial protection.
Of course, all gay or lesbian policyholders need to take the appropriate steps to ensure that their families are covered. Before committing to any policy, verify that you can name your partner – and if applicable, a child of whom you are the non-legal parent – as a beneficiaries.
Education Funding Options for GLBT Families
Two very useful financial tools to save for college are Section 529 savings plans and Upromise. Section 529 savings plans are tax-advantaged investment programs sponsored by a state and managed by a designated financial instruction to help families save for college. High maximum contribution limits allow you and your partner to invest as much as possible in your child’s future. Section 529 plans are offered through Registered Representatives of NYLIFE Securities (Member NASD/SIPC). Please keep in mind that there are fees and charges associated with a 529 plan, and that the underlying investment options are subject to market risk and will fluctuate in value.
Some gay and lesbian parents may get more favorable tax benefits from 529 plans sponsored by their state. Consult a GLBT-friendly tax advisor for how 529 tax treatment would apply to your particular situation.
The tax legislation exempting earnings on qualified withdrawals from federal income tax expires on 12/31/2010, unless extended by Congress.
Upromise is a free service that gives you money back for college when you purchase products or services from America’s leading companies, such as New York Life. Enrolling takes just a few minutes at www.upromise.com. Gay and lesbian parents can save for their child’s education while doing everyday things such as buying gas at Exxon Mobil, using AT&T or AOL, shopping at Borders or Staples – even purchasing a GM car or Countrywide mortgage. You can even save when you buy thousands of items (such as Coca-Cola, Kellogg’s, Tide, or Tylenol) at the grocery store. There are no coupons to collect or receipts to keep – and anyone, including grandparents, family, and friends can join to help out. More than 3 million families have already enrolled.
For more information about 529 plans and other products and services that can help you and your partner save for your child’s college education, please contact Mary L Stockton, Registered Representative, NYLIFE Securities Inc., at 8910 University Center Lane Suite #300, San Diego, CA 92122, 858-623-8600.
Please contact your Investment Professional for more information on 529 plans and/or to obtain the appropriate disclosure statements and the applicable prospectuses for the underlying investments for the 529 plans we have available. Investors are asked to consider the investment objectives, risks, charges and expenses of a portfolio carefully before investing or sending money. The disclosure statements and prospectuses contain this and other information about the investment options and their underlying investments. Please read this material carefully before investing or sending money.
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