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College Savings 529 Plans vs Whole Life Insurance

Planning for a child’s or your own college education can often seem overwhelming, with numerous options and decisions to make. Navigating the complexities of financing this significant investment in one’s future demands careful consideration and strategic planning. While the conventional approach often involves financing college through student loans, (which has resulted in a staggering $1.7 trillion in student loan debt in the U.S.!), exploring alternative methods and savings strategies can provide a more financially secure path toward achieving higher education goals.

The Traditional Saving Approach – The 529 Plan

529 Plans have been the staple savings method since 1996, created by the IRS. While 529 Plans offer many benefits for saving for college expenses, there are also some drawbacks to consider:

Alternatives to the 529 Plan

Prior to the introduction of 529 Plans (and many ways still), some traditional methods for college savings included:*

An out-of-the-box approach for college savings

One creative and little used strategy to build up money for college is properly structured whole life insurance. It has guaranteed cash value growth (not market tied!), tax advantages, flexible access to funds, ZERO impact on financial aid, and so many more benefits.

In conclusion, whole life insurance can be an amazing alternative to 529 Plans for college savings, providing unique benefits that may align better with many families’ financial goals and circumstances. With its guaranteed cash value growth, tax advantages, flexible access to funds, and the added protection of a death benefit, whole life insurance policies can serve as a versatile and reliable savings vehicle. Furthermore, the forced savings aspect instills a disciplined approach, while the minimal impact on financial aid eligibility ensures that additional assistance remains within reach. Ultimately, each family’s financial situation and preferences will dictate the best approach to saving for college, but whole life insurance policies present an attractive option for those seeking a well-rounded and secure strategy.

Reach out today, to see what we can do for you and your family…

*Details change year over year, and laws change. These facts apply through 2021, and may have changed. Please do your due diligence and gather all your facts from various sources before choosing a method and sticking to it.

Published April 26, 2023

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~ Let no man seek the good of his own, but that of his neighbor. 1 Corinthians 10:24 ~

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