benefits as a 529 Plan or ESA, but they can be a good supplement to paying for college. Putting money directly in these investments can help to maximize your wealth-building potential, without many of the restrictions that come along with other tax-advantaged vehicles. Talk With Your Teen About College…and Finances Start having small conversations with kids during high school years, with timing and depth of conversation dependent on maturity levels and your child’s interest in higher education. You might tell them about what you are doing to budget, what might be a realistic consideration for your family, and other potential sources of financing that might be available, such as merit money or scholarships that they could begin to talk with their guidance counsellor about and research on their own, as well as saving individual stocks, and ETFs, for instance, and more investment freedom than some 529 plans. Contributions are limited to $2,000 annually per beneficiary. Families at higher income levels may also not be able to contribute. Contributions also need to stop when the beneficiary turns 18; other restrictions may apply. Education-focused trusts can give parents more control over how, when, and to whom funds are allocated, and they do not have contribution limits. They may also be used as a vehicle to help reduce the assets considered by financial aid. However, they might also create an annual tax obligation on investment earnings, so it is important to talk with a tax professional about setting them up to address your needs. Taxable investments such as stocks, bonds, mutual funds, real estate, and other investments may not offer the same tax 140 HAWAII PARENT January/February 2026 When it comes to college savings, expert advice can make all the difference. “When asked about gifts for birthdays or other special occasions, consider suggesting that grandparents or other relatives contribute to a college savings account”
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