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College & Education Planning

From Section 529 Plans to Coverdell Education Savings Accounts, let our experienced Wealth Management team help you create a tailored plan for investing in education.

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A college education builds an essential foundation for your child’s success. With the cost of college increasing at a rapid pace, many wonder how they can fund this long-term goal. At Cadence Bank, we believe it’s never too early to begin saving for this important event.

Our Wealth Management team can help create and administer your college savings plan. We have the knowledge and experience to understand your goals and create a plan tailored to your unique needs.

College & Education Planning Tools

There are a variety of savings options to help support your education planning. Cadence financial college planning advisors can design a plan customized for your family that incorporates the right tools to save for college, including:

529 Savings Plans

Section 529 Plans are the college savings vehicles for many American families. These savings plans, also known as “qualified tuition plans,” offer tax-free distributions and tax-deferred growth. They are sponsored by states, state agencies or educational institutions.

529 plans come in two forms: prepaid tuition plans and college savings plans. The prepaid tuition plan allows you to lock in future college tuition at today's rates, while college savings plans allow you to seek market returns on your contributions by investing them in securities, mutual funds and exchange-traded funds (ETFs).

Coverdell Education Savings Accounts (ESAs)

Originally established as an Education IRA, the Coverdell ESA is similar to a Section 529 Plan in that it is a tax-advantageous investment strategy. ESAs have an annual contribution limit of $2,000 and can be used to fund any education expense – not just college.

Contributions are not tax deductible, but they feature tax-deferred growth and tax-free withdrawals if the money is used for education expenses. They are oftentimes used in conjunction with a 529 savings plan.

Roth IRAs

Most popularly known as a retirement savings plan, Roth IRAs can also be used as a college savings tool. They’re a flexible way to save for college and retirement at the same time.

In general, you can withdraw Roth IRA contributions before you turn 59 1/2 years old for whatever reason you choose without paying any tax penalties. This way, you could extract some of the principal to pay for college expenses while leaving the rest intact for retirement.

Custodial Accounts

Custodial accounts (also known as UTMAs and UGMAs) are a common vehicle for college savings because they allow adults to transfer funds to minors. While they don’t feature tax-free distributions and growth, the overarching benefit of custodial accounts is that they allow the earnings to be taxed at your child's rate instead of your presumably higher tax rate. Additionally, there are no annual contribution limits on custodial accounts.

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Contact one of our Wealth Advisors today.

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