Saving for College 

man with daughter in vegetable garden 
Saving for college isn’t as simple as it used to be. Today’s options offer more potential but must be chosen carefully. It’s important to make decisions as early as possible while also providing for your own financial security.

Overview 

Your Future 

We Can Help 

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College Savings Plan

A quality education is vitally important in today's competitive job market. If you want to help pay for your child’s education, but you're not sure you're saving enough, or even how much you'll need, contacting Northwestern Mutual can be the first step in determining where you stand in your college savings plan goals.

College costs vary by private and public institution and two-year and four-year programs. Northwestern Mutual can provide you with a copy of the College Costs brochure.  The brochure is updated yearly and provides information on tuition, room and board, and other fees and educational costs.

College Savings Plan Options

Develop a college savings plan strategy that best suits your family’s financial planning needs.

Your strategy may include:

Other funding options may be:

  • Uniform Transfers to Minors Act (UTMA)
  • Uniform Gifts to Minors Act (UGMA)
  • Grants
  • Hope Credit and Lifetime Learning Credit
  • Financial Aid
  • Scholarships

Resources

  • College Costs brochure available from Northwestern Mutual.
    The brochure is updated yearly and provides information on tuition, room and board, and other fees and educational costs.

     
  • Department of Education
    Information on U.S. education policy, research, grants, financial aid, and more.

     
  • IRS (search for “college bound”)
    Information on scholarships and fellowships, tuition and fees deduction, education credits and student loan interest, application for Federal Student Aid.

Your Future

It may seem strange to think about your own future when creating a college savings plan seems more important.

Saving for retirement helps you maintain your financial independence. Experts also caution parents the long-term benefits of foregoing savings into a retirement plan can be irretrievable.  With grants, financial aid and scholarships available, a student has a greater chance of making up the difference for their college education than you do in making up for lost retirement savings.

Retirement Planning

It’s important to take advantage of special retirement accounts such as 401(k), IRA, and 403(b) tax-sheltered annuities before funding your college savings plan. These retirement plans offer special tax advantages and may offer matching contributions from your employer.

Life insurance, annuities and funds in retirement accounts will not affect your child’s prospects for federal financial aid (unless you take distributions from your retirement account during your child’s years in college).

Protect Your Current Income

It’s also important to insure your ability to help pay for your child’s education. Your own financial security is important to your child. You don’t want to burden your child with your future health care or housing expenses. You may even jeopardize your college savings plan by neglecting to protect your income.

  • Life Insurance
    A permanent life insurance policy on your life can be a smart financial move in the event of your death and offers:

     
    • Available funds for your child’s college savings plan should you die. A permanent life insurance policy’s cash value is not considered an asset when applying for Federal Financial Aid.
       
    • A permanent life insurance policy on your child’s life can grow to provide cash value by the time your child is ready to start college.

    •  
  • Disability Insurance
    A disability could have a tremendous impact on your child’s college savings plan. Disability insurance helps guard against the loss of income due to a sickness or injury.

We Can Help

Your college savings plan depends on a variety of issues:

  • How many years you have to save
  • Current savings vs. future needs
  • Your risk tolerance

A college savings plan is only part of a total financial plan. It’s also important to consider:

Northwestern Mutual can help you build a college savings plan that’s part of your financial plan to include savings and investment services including tax-advantaged 529 plans and Coverdell Education Savings Accounts.

Planning for your financial security may help your dreams for your child’s education come true.

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