Saving For School

Ways to invest in your children’s education.

Mary McDougall, wealth manager and first vice president of wealth management at Merrill Lynch in Saint Paul, shares three options when it comes to saving for college:

529 Plans
“All of the money you put away in a 529 Plan is tax-deferred,” McDougall says. “And when the money comes out, you’ll never pay tax on it because of tax-free growth.”

McDougall suggests a Uniform Trust for Minor Account. “Once parents put money in, it belongs to the kids so it has children’s tax characteristics,” which are lower than adults’.

Capital-Appreciated Stock
If possible, McDougall suggests having a grandparent gift stocks to a grandchild, because it will have no income tax when it’s taken out.

Before investing, McDougall says it’s important for parents to remember: You can borrow money for college, but you can’t borrow money for retirement.

-For more information, call Mary McDougall at 651.298.1786.