Asset placement moves aid
Student-owned assets are assessed at roughly 20%, parent assets at 5.64%. The same money produces very different aid packages.
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Education & Family
Family finance is dominated by two costs that arrive at opposite ends of childhood: childcare in the first six years, and tuition in the last four. Both are large enough to distort every other plan, and both are surrounded by products sold on tax benefits that only apply in specific circumstances. This desk separates the genuine advantages from the marketing.
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Fund the right things in the right order
The single most common planning error here is funding a child's education ahead of your own retirement. There are loans for one and not the other.
- Your retirement firstThis is not selfishness, it is arithmetic. Your child can borrow for tuition at subsidised rates; nobody will lend you a retirement.
- Then the tax-advantaged wrapperA 529 grows tax-free for qualified expenses and, in many states, cuts your state tax bill on the way in.
- Mind the aid formulaWhere an asset sits changes the aid calculation dramatically — parent assets are assessed far more gently than the student's own.
- Then flexible savingsOnly after the above does a taxable or custodial account make sense, and custodial money legally becomes your child's at majority.
Custodial money is irrevocable
An UTMA is a completed gift. At the age of majority your child can legally spend it on anything at all, and you cannot object.
Childcare front-loads
The heaviest family cash-flow years usually arrive long before tuition. Budget for the first six years as seriously as for college.
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