More than 57%of Parents Will Do This…

, ,

Will you?

Based on numerous surveys over the recent years, more than 57% of parents will raid their home equity and/or retirement savings in order to help cover their or children’s undergraduate education.

They will make sacrifices, even if they can’t afford to do so, as they want better lives for their children.

Low interest rates and the tax deductibility of mortgage interest make a home equity line of credit or a refinance highly appealing.

But, what happens if your financial situation changes?

A job loss, a medical crisis – your home’s in jeopardy…

What about your retirement plan? The maximum loan amount is the lesser of 50% of your vested account balance or $50,000.

Depending on the school, that may help cover only one or two years.

Further, you may miss any gains that occur while the loan is in repayment.

And, if you lose your job or get laid off and can’t make loan repayments, the loan becomes a distribution subject to ordinary income taxes and, quite possibly, a penalty.

Better strategies exist, strategies that may see you through the college years while protecting other goals you may have.

Find out what you don’t know. Contact our Professional College Planners to schedule an appointment today.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *