Perspectives Blog

Saving for college — What’s the real cost of waiting?

Columbia Management, Investment Team | September 16, 2013

Just a few years’ delay in saving for college can dramatically increase the monthly savings needed to meet education funding goals. Early saving for college can reduce the burden of borrowing and pressure on current income when the child attends college. A “Cost of Waiting” calculator can help you see just how much it could cost you for each year you wait to start saving. Given the skyrocketing cost of higher education, saving for college can…

Capture five tax benefits with a 529 college savings plan

Columbia Management, Investment Team | March 21, 2014

By contributing to a 529 plan, you may benefit from tax advantages — without giving up control of plan assets. As an estate planning tool, 529 plans may allow removal of significant assets from your taxable estate. Investment growth in a 529 plan, as well as distributions, is not subject to the new 3.8% net investment income surtax. Owning a home. A financially secure retirement. A college education for a child or grandchild. These are a…

How will you pay for your child’s future education?

Columbia Management, Investment Team | August 27, 2013

College savings plans offer an important tool for managing the cost of higher education. Saving in advance could offer a significant cost savings compared to taking loans during college. College Savings Calculators can help you assess your personal situation. Before you know it, that special day will arrive — your child will be off to college. But are you prepared for the significant college expenses that may come your way? With an education f…

Parental income, not assets, affects college financial aid

Columbia Management, Investment Team | May 29, 2013

The factors that affect needs-based financial aid for college are often misunderstood. The “Expected Family Contribution” is determined predominantly by parental income, not parental assets — such as savings in 529 plans. A separate savings vehicle, not in the name of the child, may be the most advantageous in the financial aid formula. One of the biggest misconceptions about saving for college is the impact that assets may h…

Gifting strategies with 529 plans

Columbia Management, Investment Team | December 3, 2013

529 college savings plans allow parents and relatives to implement advanced gifting strategies. Contributions can be prorated over five years without incurring federal gift tax consequences. With a 529 plan the account owner maintains control of the assets in the account even though contributions are considered completed gifts. Parents and relatives can benefit from advanced gifting strategies available only with 529 plans. With the current an…

Trust accounts and the net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | October 9, 2013

…vidual who set up the trust, so the NIIT would apply to the person and not the trust. Trusts, funds or accounts that are exempt from the NIIT, include charities and retirement plans charitable remainder trusts, Archer medical savings accounts, health savings accounts (HSAs), qualified tuition programs, and Coverdell education savings accounts….

High-cost colleges beware

Beth Ware, Senior Municipal Bond Analyst | August 20, 2013

High-cost colleges beware: newly cost-sensitive students may pressure your business model. Municipal bond investors should be aware that certain categories of universities are likely at greater risk of credit rating downgrades. We remain concerned with universities that do not have a strong balance sheet, revenue flexibility and/or reputation to compete long-term in an industry where revenue growth is projected to be stagnant. The cost of high…