Recovering The Cost Of Education
Over
time, income-shifting strategies can lead to significant savings. In
the example we've just outlined, clients would achieve a total savings
of close to $40,000 by the end of their daughter's four years of
college.
By the time they are finished paying for college, most parents have about 15 years until retirement. During that time, the $40,000, if properly invested, could grow into sizable portion of a client's retirement nest egg. In that sense, the income-shifting strategies we have described allow you to help clients both pay for their childrens' college cost and add to a client's bottom line at retirement.
These tax-saving strategies may not eliminate 100% of the federal tax when paying for the most selective and most expensive colleges, some of which can cost more than $50,000 per year. But in combination with other tax strategies that can also minimize estate taxes, you can go a long way toward providing clients with a relatively tax-free college education at the college that is the best fit for their children.
Troy Onink is the CEO of Stratagee.com, the developer of the Smart Search and Stratagee college planning software solutions. More information is available at www.stratagee.com.
Lloyd Paradiso is an executive vice president of Stratagee.com, the founder of The Admissions Authority and a leading college admissions consultant.