Why Is Education Saving So Important?
TURN FUNDING STRAIN INTO FUNDING STRATEGY
Funding your loved one’s college education is one of the most challenging, but rewarding, financial expenses you’ll face. When you consider that in the next 18 years the average cost of higher education is expected to rise by 185%, you realize how important it is to begin to save.1
College costs now and later2
For illustrative purposes only.
Does saving the full amount for college feel overwhelming?
You’ll stress less when you begin to understand your saving and funding options, which begin, simply enough, with 1-2-3: money that is
Saved, Awarded and Borrowed
.
College Funding Pyramid
Your goals are within your reach
Since the college years arrive in the blink of an eye, it’s never too early to begin saving. Do you keep putting it off? The good news is that it’s not too late and it’s not that difficult to build a sound savings plan. Getting started is easier than you think. Begin by taking these five simple steps:
- Determine the cost
- Identify your savings profile
- Set your savings goal
- Choose a savings vehicle
- Establish a savings schedule
Our
college saving tools
can help take the guesswork out of estimating costs.
Good news! There’s more than one way to save.
Investment vehicles used to save for college today include:
- Coverdell education savings account
- UTMA/UGMA (Uniform Transfer/Gift to Minors Act) accounts
- Trusts
- Savings bonds
- Traditional taxable accounts
- 529 college savings plans
Click here to compare the features and benefits of these different savings vehicles.
529 college savings plans: solid strategy. Money that is saved is your foundation. And though there are varied college saving vehicles, for many Americans 529s are the preferred choice, because they offer three main advantages over traditional savings plans:
- Tax advantages, including tax-free earnings for qualified college expenses, gifting and estate planning benefits
- Account owner control
- Flexibility
Your goals are within your reach.
Since the college years arrive in the blink of an eye, it’s never too early to begin saving. Do you keep putting it off? The good news is that it’s not too late and it’s not that difficult to build a sound savings plan. Getting started is easier than you think. Begin by taking these five simple steps:
- determine the cost
- identify your savings profile
- set your savings goal
- choose a savings vehicle
- establish a savings schedule
Our college-saving tools can help take the guess work out of estimating costs.
Good news. There’s more than one way to save.
Investment vehicles used to save for college today include:
- Coverdell education savings account
- UTMA/UGMA (Uniform Transfer/Gift to Minors Act) accounts
- Trusts
- Savings bonds
- Traditional taxable accounts
- 529 college savings plans
Click here to compare the features and benefits of these different savings vehicles.
529 college savings plans: solid strategy. Money that is saved is your foundation. And though there are varied college saving vehicles, 529s – for many Americans – are the preferred choice because they offer three main advantages over traditional savings plans:
- tax advantages, including tax-free earnings for qualified college expenses, gifting and estate planning benefits
- account owner control
- flexibility
Can’t save the entire cost? Take your worry down a notch.
Additional aid is available, and it comes primarily in four forms:
- Scholarships – Money that is awarded and not expected to be paid back.
- Grants – Unlike scholarships, which may be contingent on requirements, grants are usually "No strings attached."
- Federal work-study programs – Participating schools provide part-time jobs both on and off campus for students who demonstrate financial need.
- Student Loans
- Federal – Allows students and their parents to borrow money at low interest rates and with flexible repayment terms through programs supported by the federal government.
- Private – Issued by a lender such as a bank or credit union.
Grasping the fundamentals of funding is the springboard for your strategy. A financial advisor can help synchronize your college funding options and create a plan tailored to your personal situation.
Once you set goals, calculate costs and choose a saving vehicle, your savings plan is set into motion; every day takes you closer to your goal, and you can get a good night’s sleep.
Work with a financial advisor for sound guidance
A trusted financial advisor has the investment expertise and market perspective to help you achieve your college funding goals and provide a clear understanding of 529 plan features.
