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Saving For
College
with 529 Plans
As another school year ends,
college tuition payments are a year closer. Parents often
wonder when they should start saving and how
much?
College tuition and fees are
costly and on the rise. But even with 4-year private
schools running on average $36,000 per year, the cost
is well worth it. According to the US Census Bureau,
individuals with a bachelor's degree earn more than double
those with just a high school diploma.
How much to save depends on how
much you think your child's education will cost. The
best way is to start saving before they are born. The
sooner you begin, the less money you will have to put away
each year.
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Quick
Example: Suppose you have one child, age six months, and
you estimate that you'll need $120,000 (4yrs x $30k) to
finance his college education 18 years from now.
If you start
putting away money immediately, you'll need to save
$3,500 per year for 18 years (assuming an after-tax return of
7%).
On the other
hand, if you put off saving until the child is six years old,
you'll have to save almost double that amount
every year for twelve years.
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Want are your numbers for your
child's education? Use our online College Savings
Financial Calculator (pictured below +
click here to access).
You can enter your estimate
Education Expenses for each child, their ages and all the
other variables in yellow.
For more information on the
rest of the article on College Savings with 529 Plans,
click here.
Or if you want to talk or ask me questions, call me, Paul Sullivan, at 240-316-3531.
As always you can call our offices if you have any
questions about these or any other accounting related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA |
