College Saving Increases
If you have children, college is one of the major expenses that lie ahead. Many families are saving as much as they can, but for some, it’s not enough.
Depending on the course of study and the college you choose, the costs vary. According to the College Board, the average total cost of public college in-state is $25,290. Once you head out of state the amount skyrockets to over $40,000. Private colleges cost about $10,000 more than that! These are figures per annum. That means this is the amount you will have to spend every year.
If you don’t save enough to cover these costs, you could end up needing a student loan to send your child to college. There is good news though. American parents are saving more than before to try and make sure that their kids are able to attend college.
According to a new report by lender Sallie Mae, the average amount saved in the United States has gone up by a tenth since 2016 and is now in the region of $18,000.
Statistics show that in America, of the over 19 million students projected to attend colleges and universities in the fall of this year, close to 7 million will be doing a two-year stint. In the same period, over 13 million are going to four-year institutions. If you have only $18,000 set aside that won’t cover four years. In fact, you won’t even be able to cover the in-state costs for a year, since they are over $25k every year.
One way many people have been boosting their savings is to use a 529 plan. According to recent data from the College Savings Plans Network, a 529 college savings plan is a tax-advantaged account which allows families to set aside after-tax dollars and have them grow as an investment free of federal income taxes. As long as you take the money out to pay for qualified education expenses, you are entitled to do so, tax-free.
Saving for college seems to be on the increase. The more education the next generation can get, the better off they will be.
Certain investments are offered by prospectus. Investors should read the prospectuses carefully and consider the investment objectives, risks, charges, expenses, and other information before investing.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC