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‘School supplies’ for Mom and Dad

Thrivent Financial for Lutherans uses fall theme to remind parents to think about the future

This back-to-school season, stock up on college funding advice. Back-to-school shopping season means big sales for retailers selling pencils, backpacks, clothes, and tech gadgets. Young parents know that as children get older, their back-to-school list grows with them. Eventually for many, that list will grow to include dorm necessities, textbooks and, yes, college tuition.
Parents, if blunt scissors and crayons are still on your child’s school supply list, now could be the right time to start planning your college funding strategy. Consider this list of “school supplies” to help you and your student prepare for college.

529 Plan

529 plans are a tax-deferred way for anyone to invest in a child’s education. These accounts are controlled by your state or by a manager your state has appointed. Anyone can establish a 529 savings plan naming anyone as a beneficiary. Investments may be used at any approved private or public school. Earnings in this account are tax-deferred until withdrawn, and distributions are exempt from federal and sometimes state taxes. Check with a financial professional in your area to find out how a 529 plan in your state could be helpful to your college funding strategy.

Custodial Account

This type of savings account allows you to build savings for any child, meaning grandparents, relatives, and friends could also set this up. While the child’s name is on the account, the adult custodian is responsible for overseeing it until the child turns the age of majority, usually 18, 21, or 25.
Custodial accounts can be used for any reason, meaning that, if your savings exceeds the amount needed for tuition, your child could use it for living expenses or save it for something else. Custodial accounts usually have tax savings benefits, as well.

Coverdell Account

The savings accrued in a Coverdell account can be used for approved expenses before your child goes to college, on K-12 expenses for students in private or public schools, as well as eligible post-secondary education expenses. A child can receive up to $2,000 annually in a Coverdell account until age 18.

Other types of accounts

* Trusts
Contact an attorney to see if a trust could be right for you. Trusts can be used for education and other purposes. Once the trust belongs to your child (usually at age 18), that money is no longer included in your taxable estate. Contributions to a trust have no minimum or maximum, and anyone can contribute.
* IRAs
While traditionally used for retirement savings, traditional and Roth IRAs allow the withdrawal of funds penalty-free if used for educational purposes. Contributions may be tax deductible and grow tax deferred until withdrawal. Contact a financial representative about using IRAs for college funding, as this could affect your retirement strategy and financial aid eligibility.
* Permanent Life Insurance
If something should happen to you, a permanent life insurance contract can help ensure that goals like education can be met, even if the unthinkable happens. In
addition, permanent life insurance contracts accumulate cash value that can be used during your lifetime. Visit for more information on types of life insurance to help you pay for college.
With so many options for college funding to choose from, selecting the best set of tools for a child can be difficult. A financial representative can help to decide which options are best to meet a particular family’s needs. Visit to contact a financial representative, learn more about college funding options, and even estimate needs using a College Savings Calculator.
College funding strategies, like back-to-school shopping, are all about preparation. Hop on the bus to financial preparation by starting or building your college funding strategy today!
Thrivent Financial for Lutherans is a not-for-profit, Fortune 500 financial services membership organization helping approximately 2.5 million members achieve financial security and give back to their communities. Thrivent Financial and its affiliates offer a broad range of financial products and services, including life insurance, annuities, mutual funds, disability income insurance, bank products and more.
As a not-for-profit organization, Thrivent Financial creates and supports national outreach programs and activities that help congregations, schools, charitable organizations and individuals in need. For more information, visit

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