How To Save $163K on Jewish Day School Bill
Image by getty images
Getty Images
(JTA) — When the parents of three school-age children sat down with their financial adviser to try to figure out how to minimize their anticipated private school tuition bill of $810,000 through high school, they came up with a plan that shrunk the bill by $163,000.
How’d they do it?
Well, mostly by pre-paying, according to The Wall Street Journal.
Here’s how they worked it: With tuition averaging $30,000 per year for each of their children, ages 11, 9 and 7, they figured their total bill would be $810,000 if they factored in average annual increases of 5 percent per year.
If they pre-paid, however, they’d lock in the $30,000 rate. Their adviser, Kevin Stophel, suggested they lock in only 11 years of tuition payments. For the remaining payments, they could set aside the money and out-pace the expected tuition increases with smart investments.
Stophel also had the parents establish a 2503(c) minor’s trust for each of the youngest children to allow that money to grow tax free inside those trusts.
This could be a model for day school tuition savings — for those parents who have hundreds of thousands of dollars of cash lying around to pre-pay tuition, of course.
A message from our Publisher & CEO Rachel Fishman Feddersen
I hope you appreciated this article. Before you go, I’d like to ask you to please support the Forward’s award-winning, nonprofit journalism during this critical time.
We’ve set a goal to raise $260,000 by December 31. That’s an ambitious goal, but one that will give us the resources we need to invest in the high quality news, opinion, analysis and cultural coverage that isn’t available anywhere else.
If you feel inspired to make an impact, now is the time to give something back. Join us as a member at your most generous level.
— Rachel Fishman Feddersen, Publisher and CEO
