Perspectives Blog

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…

Capture five tax benefits with a 529 college savings plan

Columbia Management, Investment Team | March 21, 2014

…ment. A college education for a child or grandchild. These are aspirations most of us can relate to. Fortunately, there are tax incentives available to help you pursue these substantial financial goals. In the case of college savings, 529 plans offer distinct tax advantages over other college savings vehicles. With a 529 plan, parents, relatives and friends can help fund a significant portion of a loved one’s future college expenses and at the sa…

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…

Hanging in

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 20, 2013

…ement spending. With the continued reluctance to use credit and little ability to tap into home equity to support spending, wages are a key determinant this cycle for consumer spending. Some cushion has been found by reducing savings, but this has limits, particularly with savings rates now very low. Spending follows wages and it will be difficult for retail spending to gain much traction with the tie to shallow compensation trends. The chart bel…

The bean counting on second quarter GDP

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | July 25, 2013

…re producing steady job growth near 200,000 monthly, consumer confidence is improving, and income gains are slightly better. Of course consumption will be softer than the 2.6% advance in Q1, but lower inflation and a dig into savings appears to have helped consumers maintain their purchases of durable goods (think autos) at only a slightly slower pace. This has proved to be an anchor for growth, in that consumption accounts for 70% of overall GDP…

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…

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…