Whether your child is in elementary school or hasn’t even been born yet, it’s never too early to develop a college savings plan. It may seem like a long way off, but the years go by quickly, and it is always good to be financially prepared.
Starting on college savings can be difficult. Luckily, our financial advisors have tips and tricks that make it easier than ever to get started.
One of the best things you can do for your college saving journey? Begin the process early! If you plan for college expenses 15 years before they arrive, the payments to a college savings account are much more manageable.
Though it is never too late to start, making savings payments over a 5 year window (rather than a 15 year window) will require more significant amounts of money.
If you are curious about how much you need to contribute each month, the U.S. Securities and Exchange Commission recommends this calculator.
Utilize a Financial Advisor
As we mentioned, this process can be daunting. Using a financial advisor ensures that you are taking every step you can to be financially prepared for your child’s future.
Your advisor can also advise you on different investment options, such as a 529 plan.
What Is a 529 College Savings Plan?
One of the best tools at your disposal is a 529 plan. 529 plans are financial savings accounts that are specifically intended for future education expenses. These accounts have tax advantages as well, making them a sound option.
There are two types of 529 plans; all states honor at least one of them.
Types of 529 Plans
The first type of 529 plan is a Prepaid Tuition Plan that allows you to pay specifically for “units” at certain universities. These can be used later for class/credit fees and other mandatory expenses.
The second type is the Education Savings Plan. This is more of an open account that allows you to save for all kinds of higher education expenses that your child will encounter.
Both types have their benefits! By learning about your individual circumstances, a financial advisor can help to determine which is right for your family.
Trust Trajan Wealth
If you need a reliable, experienced financial advisor to help you save for your child’s college expenses, you can trust the experts at Trajan Wealth. Wherever you are on your journey, we are prepared to help. We know what it’s like to save for college and can provide comprehensive financial services that benefit any family. Contact us today to get started!