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MARTINEZ: Going back to school: Tips on how to pay for it | Local News

Going back to school can help you advance in your business, re-enter the workforce, or support another act while planning a whole new career. But what are the right strategies that adults should keep in mind to help manage the cost of education?

Here are some financial tips for going back to school as an adult:

1. See what your employer has to offer. Many large companies offer benefits such as tuition fees through a qualified program – up to $ 5,250 can be excluded from revenue. But even if tuition above $ 5,250 is taxed as income, it’s still a great strategy for paying for it yourself. Check with your employer to see if they offer scholarships, educational discounts, or other resources you could take advantage of.

2. Consider delayed school savings plans. If you have money in Plan 529 or in your Coverdell Education savings account, it may make sense to use those funds to go back to school. Did the plan start out as a way to fund the child’s education? The beneficiary can often change into a qualified family member. Is your planned enrollment date months or years in the future? From now until then, you may be able to contribute to the 529 fundraising plan. In the case of ESA, however, contributions are not allowed after the beneficiary reaches the age of 18, and the beneficiary must be under the age of 30.

3. Remember tax breaks and / or tax breaks. Although not a source of direct funding, some education costs (if you are eligible) may be tax deductible. Also, the cost of education can qualify for either the American opportunity or for lifelong learning. IRS Publication 970: Education Tax Incentives * provides a comprehensive overview of education-related tax incentives and tax rules.

4. Use pension funds only if you understand the rules. You can use IRA savings for “qualified education costs” and avoid penalties for early withdrawal, although you will still be liable to tax using a traditional IRA. With the Roth IRA, you can access contribution taxes and penalties for free. Part of the earnings may be taxed, and like a traditional IRA, you may be able to avoid the penalty of early withdrawal if used for qualified education costs. Also, it may be possible to borrow from your 401 (k) plan. You should check with the plan administrator. But joining pension funds should be among the last options you consider because you are spending the resources you originally invested in your future. If you feel you need to do this, use the money for qualified expenses.


Please carefully consider the investment objectives, risks, costs and expenses before investing in the 529 savings plan. You can obtain an official statement containing this and other information by calling your financial advisor. Read it carefully before you invest.

Wells Fargo Advisors is not a tax or legal advisor.

This article was written by Wells Fargo Advisors and courtesy of Alonso Martinez, Financial Advisor at Valdosta, at (229) 259-7844.

Investments in securities and insurance products are: Not insured by the FDIC / not guaranteed by the bank / may lose value.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, a member of SIPC, a registered broker-dealer and non-banking agent of Wells Fargo & Company.

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