Education Savings Account

Higher education expenses are aptly named because they continue to climb higher. They also receive a significant amount of press coverage, thus raising the awareness that mounting costs are not going to subside in the near future.

The increasing expense is a key concern for many parents and guardians who are planning for this financial responsibility. Demonstrating your understanding about this challenge and offering assistance can go a long way in cementing client relationships.

Suggest the Education Savings Account

The Education Savings Account can help offset the cost of higher education. Earnings are tax-free and a distribution may occur without taxation if it is applied to a qualified higher education expense.

And there is one remarkably liberal feature of the Education Savings Account. Your client can transfer an account from one child to another child in the same family if the intended recipient cannot use the assets for education purposes. In a family with several children, one child could conceivably benefit from the unused balances of the others.

Anyone can contribute to a child’s Education Savings Account. For instance, grandparents are an ideal source of contributions. The Education Savings Account has a $2,000 (up from $500) per year contribution limit. Bear in mind that involvement in your client’s higher education financial planning today may result in more substantial contributions under your advisement in the future.  Talk to your clients about the Education Savings Account to strengthen your relationships.

The information contained in these materials is believed accurate at the time of writing but is not guaranteed. Delta accepts no responsibility for its use whether in whole or in part.