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Using Annuity to Pay for College

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For parents and grandparents, it’s never too early to start saving for children and grandchildren. There are many options to help you prepare for one of the most critical milestones in the lives of your children or grandchildren.

Annuities as College Saving Strategy

Fixed or fixed indexed annuity products offer significant benefits. Your account value can grow tax differed, and it protects you from downside market risk. When the market is up, your money grows, and when the market is down, you don’t lose your savings.
 

If your child receives a scholarship or decided not to attend college, you can use the annuity money for other purposes.

How About 529 Plans?

A state or state agency sponsor 529 education plans. It is a common way to pay for college and other educational expenses. 529 Plan earnings grow tax-deferred, and any qualified withdrawals are tax-free.
 

While 529 plans have many advantages and can be useful in preparing for the future, there are limitations to consider.
 

  • An account can lose value due to market downturns

  • You pay penalties if the money is not used for education purposes

  • The account earnings can affect an application for financial aid

  • Many plans include yearly fees and administrative costs
     

If your child receives a scholarship or decided against college, you may have to pay a significant penalty to withdraw the money in the 529 savings plan.

What Is the Best Option?

Just like retirement planning, diversification is key to lowering risk. You can do the same with your child’s college savings plan. Based on your child’s education needs, we can guide you on proper fund allocation.

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Disclaimer: Plan requirements, qualifications, restrictions, and availability apply. Please speak with a licensed agent for details. Call Us (720) 744-0065
 

We offer college savings programs nationally – local Colorado market (all counties)