A financial professional in Birmingham, Alabama, Michael Mullis is a managing partner of Kelley & Mullis. Many of Michael Mullis’ clients have to pay for their children’s college education in addition to their own present and future needs. Kelley & Mullis offers several savings options to make this significant investment easier.
Outside of family wealth, the oldest means of funding college are student loans, work-study, and federal financial aid. Students can also apply for grants and scholarships. Although financial need and grades are major determinants, scholarships can also be awarded on the basis of civic engagement and extracurricular pursuits.
Named for their governing provision in the IRS tax code, 529 plans allow parents to make contributions to investment funds and withdraw them tax-free when needed. A total of 49 states and the District of Columbia sponsor 529s. The lone exception is Wyoming, which transferred its 529 plan into a program for people with disabilities who have educational expenses. There is no limit on the amount parents may contribute each year.
Parents vested in IRAs may withdraw tax-deferred funds for educational purposes without penalty. A similar strategy is a Coverdell savings account, which is available to single individuals with a modified adjusted gross income less than $110,000 ($220,000 if married or filing jointly). Coverdells can be tied to a number of investment accounts and recipients may withdraw funds from ages 18 to 30.
Outside of family wealth, the oldest means of funding college are student loans, work-study, and federal financial aid. Students can also apply for grants and scholarships. Although financial need and grades are major determinants, scholarships can also be awarded on the basis of civic engagement and extracurricular pursuits.
Named for their governing provision in the IRS tax code, 529 plans allow parents to make contributions to investment funds and withdraw them tax-free when needed. A total of 49 states and the District of Columbia sponsor 529s. The lone exception is Wyoming, which transferred its 529 plan into a program for people with disabilities who have educational expenses. There is no limit on the amount parents may contribute each year.
Parents vested in IRAs may withdraw tax-deferred funds for educational purposes without penalty. A similar strategy is a Coverdell savings account, which is available to single individuals with a modified adjusted gross income less than $110,000 ($220,000 if married or filing jointly). Coverdells can be tied to a number of investment accounts and recipients may withdraw funds from ages 18 to 30.
