How Do Savvy Investors Plan for Education Expenses?
A colleague of ours recently shared an interesting story from a baby shower she attended: along with the standard gift registry, the parents-to-be established a 529 college savings plan for their not-yet-born child, sharing the details along with the shower invitation (also mentioning, of course, that the beneficiary would be established once they had a Social Security Number). Though this example may seem extreme, it illustrates a changing reality for many parents: that advanced planning and a long-term strategy for financing your child’s education are becoming more of a necessity than a luxury.
Education funding is one of the largest expenditures most American families will undertake, and costs continue to grow, far outpacing inflation. Today, average costs for just tuition and fees, not including room and board, exceed $33,480 per year for private schools, and $9,650 for in-state residents (or $24,930 for out-of-state residents attending public schools)1.
Funding four years of college, or potentially more, requires forethought, and savvy families need to consider how they will pay for post-secondary education, potentially including both college and graduate school. The best chance we see for a successfully executed savings plan includes getting started well in advance and harmoniously incorporating the right mix of strategies.
Interested in reading about education planning?
Tell us a little about yourself to learn more:
- The difference between a 529 Plan and a UTMA
- How to use education gifting as part of your Estate Planning strategy
- How to navigate tax credits, exemptions, and reductions related to education planning