Back-to-school season’s got a distinct rhythm to it: new shoes, new schedules and that mix of excitement and exhaustion that shows up every August. Somewhere in the middle of it all, there's usually a bill.
Most of us think of tuition as an expense to survive and something to budget around, brace for and get through. Let’s be honest…there is truth in that. On the other hand, saving for tuition also might be one of the clearest, most meaningful expressions of legacy you'll ever fund.
This rings true whether it’s a third grader's private school tuition, a college freshman's first semester or a grad school application fee that shows up years after you thought tuition was behind you. The amount changes, but the question underneath it doesn't: “How do I help someone I love take their next step and leave a legacy without losing my own footing in the process?”
Here are a few strategies worth having on your radar, no matter which kind of tuition you're helping pay for.
529 Education Savings Plans
529 education savings plans are designed specifically for education costs and can offer tax-advantaged growth, with flexibility that now extends beyond just college to cover K-12 tuition, in many cases. Part of the SECURE 2.0 Act may also allow you to roll unused 529 funds into a Roth IRA for your student. Rules and tax treatment vary by state, and there may be penalty risks on the withdrawal side, so it's worth reviewing the specifics of your situation with our team.
UGMA & UTMA Custodial Accounts
These accounts may offer more flexibility than education-specific accounts since the funds aren't restricted to tuition alone. However, it's worth noting that the assets legally become the child's once they reach adulthood.
Gifting Strategies
For grandparents who want to help but aren't sure where to start, annual gift exclusions may be a relatively straightforward way to contribute toward a grandchild's education without more complicated structures.
Cash Value Life Insurance
Certain life insurance policies may build cash value over time that may be accessed to help supplement education costs down the road, alongside providing a protection benefit. Loans or withdrawals may reduce available cash value and the death benefit, and may carry tax implications, so this is one to talk through with our team.
Coordinated Cash Flow Planning
Sometimes the most overlooked strategy isn't a new account at all—it's making sure tuition funding is coordinated with the rest of your financial picture, so you can leave your legacy for the next generation without quietly derailing your own plans.
None of these strategies is one-size-fits-all, but they're designed to help give you options before the bill arrives, not after. If you want a simple starting point, our college savings calculator can help you get a general sense of what saving for tuition over time could look like for your family.
If tuition, for any age, is on your mind this season, I'd love the chance to sit down with you and talk through it.