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College planning has become more complicated and more expensive than ever. Add to that the increasing importance of not only just getting a college education, but going to the right college, and parents are rightfully concerned about how they will pay for what is now an almost mandatory secondary education. The good news is, long before you will be in touch with things like the Ashby form and college student aid officers, there are many things that you can do to make paying for your child’s school easier.
First of all, it is never too early to begin saving for college. Some parents even start before their children arrive. If you are planning on having a family someday, starting to set aside some assets can be a good thing.
If your child is already in high school, you may feel it is too late to start saving for college, but this isn’t true. Anything put together ahead of time is better than waiting and doing nothing.
529 plans are the most popular means for saving for college since their inception as Section 529 of the Internal Revenue Code. As there are many different types unique to each state and across many educational institutions, you will want to do your research before investing. Each plan can be slightly different, but they all share the commonality of not being deductible on your federal tax return, yet the investments will grow tax-deferred and the distributions when paying for college are also tax free. The trick is to avoid any tax breaks which may conflict with other options. Again, research is required and seeking professional advice is highly recommended.
As with most savings of all sorts, the simple fact of the sooner the better remains true.. There are multiple choices and decisions you will make along the way to sending your child off to school, and knowing the best options for you and your family will help..
