College education for a child can be one of the biggest expenses a family will face. There are many things to consider when determining which college savings plan is right for you and your family. Yaegers Financial Services can help outline the advantages and disadvantages of each savings option so you can select whether or not a US Series EE Savings Bond, UTMA/UGMA account, Coverdell Education Savings Plan, or 529 Savings Plan/Prepaid Tuition is right for you.
Over the past ten years, published in-state tuition and fees at public four-year institutions increased at an average annual rate of 3.5% per year beyond inflation. This is compared to average annual rates of increase of 3.9% between 1986-87 and 1996-97, and 4.2% between 1996-97 and 2006-07. Interestingly, the average annual rate of increase of published tuition and fees at private nonprofit four-year institutions declined to 2.4% in the last ten years. (1)
The bottom line, higher education is expensive. In 2016-2017, the average annual total charges at four-year public institutions are $20,090 for in-state students and $35,370 for out-of-state students. Average annual total charges at private non-profit four year institutions are $45,370. (2)
Planning for the costs of your child’s education today can reduce the financial burden on your family and help your child avoid carrying that burden with them into the workforce. There are five simple strategies you can do to boost your college savings efforts:
- Start Early
- Invest Regularly
- Ask Friends and Family to Help
- Educate Yourself
- Work with a Financial Advisor
By following these simple steps, one of the biggest costs your family will face can be transformed into a foundation for the future of your children. Yaegers Financial Services is prepared to be there every step of the way to help build that foundation.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing
(1) Source: The College Board, Trends in College Pricing 2016. Projected cost upon child’s entrance to college for four years at a public or private college. The College Board used the CPI-U when measuring inflation in July of the year in which the academic year begins.
(2) Source: The College Board, Trends in College Pricing 2016. Projected cost upon child’s entrance to college for four years at a public or private college. Total average annual charges include total tuition and fees as well as room and board charges. The College Board used the CPI-U when measuring inflation in July of the year in which the academic year begins.