Saving for Education
The cost of a college education continues to grow each year. Knowing how much you may need and where to put those savings is key.
The cost of a college education continues to grow each year. Knowing how much you may need and where to put those savings is key.
Source: College Board and National Merit Scholarship Corporation, 2019. (Latest available data)
Planning for college means saving for more than just tuition and fees. There’s also room and board, books and supplies, personal expenses and transportation.
Starting early and saving just a little could potentially yield a lot.
Approximately how much might you have saved if you invest just $100 a month for 18 years?
That's right.
Assuming a 6% annual average return, you could have $38,745 in 18 years.
More than that.
Assuming a 6% annual average return, you could have $38,745 in 18 years.
NOTE: For illustrative purposes only. This hypothetical illustration does not reflect the performance of any specific investment. Actual rates of return cannot be predicted and will fluctuate. Your results may be more or less.
Determine whether you want to fund some or all of the costs.
The second step is determining if you could need access to the funds before they are needed for education expenses.
Many parents start with the simpler strategies and then add others as the amount they can set aside increases or if family members wish to help.
Pay-as-you-go
Uniform gifts/transfers to minors accounts (UGMAs/UTMAs)
529 Savings Plans
2503(C) Trusts
Gift (Crummey) Trusts
Education funding may have gift tax implications. Here’s what you need to know.
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