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Last updateFri, 24 Jun 2016 5pm

Food & Wine

Manresa Bread rising: Tribute to grist & groat

Manresa Bread rising: Tribute to grist & groat

Above Photo by Rhonda Mak/Town Crier; Below Photo by Joyce Oudkerk Pool/Special to the Town Crier; Right Photo courtesy of Manresa Bread
Nabeela Aijaz, above left, retail manager at Manresa Bread’s Los Altos location, teams up with baker Avery R...

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Your Health

ECH's ASPIRE expands to empower struggling youth

ECH's ASPIRE expands to empower struggling youth


Photos by Alicia Castro/Town crier
El Camino Hospital’s mental health and addiction services leaders Michael Fitzgerald and Lauren Olaiz, above, review artwork, right, by participants in the After School Program Intervention and Resiliency Educa...

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Your Home

Filoli offers free admission to military personnel

Filoli offers free admission to military personnel


Town Crier File Photo
Filoli invites military personnel to tour the estate and grounds at no charge as part of the Blue Star Museums program.

Filoli estate in Woodside is one of more than 2,000 museums and cultural institutions in the U.S. that will of...

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On The Road

Driving England's rural countryside from the left side of the road

Driving England's rural countryside from the left side of the road


We have always enjoyed our visits to England, but this year we did something different. Rather than visit the standard tourist destinations – London, the Cotswolds, Stratford-upon-Avon and so forth – we decided to explore new areas by car...

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Senior Lifestyles

Q&A: Director of senior programs looks to future with expanded facilities, activities

Q&A: Director of senior programs looks to future with expanded facilities, activities


Megan V. Winslow/Town Crier
Recreation & Community Services Department Director Manny Hernandez praises Los Altos seniors.

 

Manny Hernandez joined the city of Los Altos staff last March as director of the Recreation & Community Services De...

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Wedding To Remember

The Veils of Time

The Veils of Time


Courtesy of Los Altos History Museum

For a new spin on the Town Crier’s “Peek into the Past,” the Los Altos History Museum has been gathering historical local wedding photos and the stories behind them.

Frances Elizabeth Shoup, second...

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Your Kids

Back to School

Is Early Decision the right choice for your student?

Is Early Decision the right choice for your student?


Courtesy of Hollis Bischoff
This chart compares the rate of Early Decision acceptances with the overall acceptance rate at various colleges.

As students apply to an ever-increasing list of schools, colleges are challenged to predict accurately whether ...

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Education IRAs aren't just for kids' college anymore

By now, you might have heard that beginning in 2002, you can contribute up to $2,000 annually to an Education IRA, compared to the current $500 yearly maximum. What many people aren't aware of is that recently passed tax-reform legislation greatly expands what you can spend this money on.

Previously your Education IRA could only be used to pay for college expenses. Beginning in 2002, you can tap these funds tax free to pay for a gamut of qualified school-related expenses not only for college but also for private and public primary and secondary educational institutions. Qualified expenses may include: computer equipment and software (no games) used by the student and other household members for educational purposes; Internet service used by the student and other household members for educational purposes (e.g. research for a term paper); tutoring; school uniforms; books and school supplies; transportation; room and board and tuition; and extended-day school programs.

By paying these and other education-related expenses with your Education IRA, you pay no taxes on your withdrawals, which gives you more buying power.

For example, if you contributed the $500 maximum to an Education IRA this year for your newborn child and then contributed the $2,000 maximum next year and every year until your child turns enters kindergarten, you could potentially accumulate $15,465 at an 8 percent annual compounded rate of return.

That money can be withdrawn tax free, which is a much better deal than if you had saved that money in an interest-bearing savings account and then had to pay taxes on the interest you earned.

Consider using a combination of an Education IRA and a 529 college savings plan if you want to save for your children's college and primary and secondary school education. The 529 plans can only be used for college expenses, but the Education IRA could be available to pay for school-related expenses until college. However, unlike other savings plans such as Education IRAs, anyone at any income level can contribute to a 529 plan.

Beginning next year, 529 plan withdrawals also will be federally tax-free. In addition, U.S. residents can participate in any state's 529 plan and set up accounts for their children, grandchildren, friends or even themselves. But keep in mind that each state's plan may invest your contributions differently and levy its own costs and fees. Be sure to shop around for the 529 plan that best fits your needs.

Education IRAs and 529 plans are a one-two punch that is hard to beat. With college expenses increasing faster than inflation, parents need all the help they can get. Your financial consultant can help you determine which savings plan, or combination, is the best strategy for you.

Steve Zeller is a financial consultant with A.G. Edwards & Sons Inc., member SIPC, 379 Lytton Ave., Palo Alto 94301. For information, call 326-5010.

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