Tips to Pay for Your Child’s College Education

By Dale L. Shafer, CFP®, APMA®, CDFA®
Financial Advisor

There are various types of accounts for college savings, including 529, Coverdell ESA, IRAs, UTMAs, Brokerage accounts, etc., and each offers different tax and contribution options. Choosing the best strategy for your family will be an ongoing part of our financial planning for this phase of your child’s life.

529 College Savings Plan are very popular because many states offer tax incentives and credits for annual contributions. As an example, the state of Arizona offers a tax deduction of up to $4,000 per child (Married Filing Jointly) for 529 plan contributions.

Contributions to 529 plans can be invested to grow tax deferred, and withdrawals are tax-free when funds are used for qualified education expenses. While 529 plans are commonly owned by parents and grandparents, anyone can contribute on behalf of the child – potentially a great gift idea for birthdays and other special occasions.

You can start saving to a 529 plan with as little as $25. Studies have shown children with even a small amount of college savings are more likely to attend and graduate college. Some considerations for investing include type of account, tax benefits, enrollment in state or private university, and the potential for scholarships and grants. Additional information and resources for the Arizona 529 plan can be found at

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The views expressed here reflect the views of Dale L. Shafer, CFP®, AMPA®, CDFA® as of January 20, 2022. These views may change as market or other conditions change. Actual investments or investment decisions made by Ameriprise Financial and its affiliates, whether for its own account or on behalf of clients, will not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not account for individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Past performance does not guarantee future results and no forecast should be considered a guarantee either. Clients should carefully consider the investment objectives, risks, charges, and expenses associated with a 529 Plan before investing. More information regarding a particular 529 Plan is available in the issuer’s official statement, which may be obtained from an Ameriprise financial advisor. Investors should read the 529 Plan’s official statement carefully before investing.

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