National College Savings Month
September is National College Savings Month! Oftentimes, families do not consider the cost of college until it is time to start looking at schools for their child. It is never to late to start saving for college.
Do your research!
College seems to cost more and more each year. Try to think of how you can help without hurting your own retirement savings. When you look at the costs of colleges, it may seem daunting but just like every big expense you will need to stat with a savings plan to get there. Your child can look at possibly attending a 2-year community college first then transferring to a 4-year school to help keep the costs down.
There are many options to save for college, one is a 529 savings plan. This is a tax advantaged (meaning tax-free or tax deferred) investment plan that allows people to set aside money for a beneficiary such as your child or grandchild. If the money is withdrawn for qualified education expenses such as tuition, school fees, etc. it is exempt from federal income tax.
Get your child involved!
Maybe you want your child to help pay for school. Have them put away a set amount each month or during the summer from their job to help with their goal. Also, make sure to have them apply for as many scholarships as possible which can help with the overall cost of college.
Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing; specific plan information is available in each issuer's official statement, which can be obtained from your financial professional. Be sure to read carefully before investing.
There is the risk that investments may not perform well enough to cover college costs as anticipated. Also, before investing, consider whether your state offers any favorable state tax benefits for 529 plan participation, and whether these benefits are contingent on joining the in-state 529 plan. Other state benefits may include financial aid, scholarship funds, and protection from creditors. (08/20)