Saving and Investing Money for College

Do you know that college education in US can be very costly? Tuition fees in public universities alone start from $17,000 for a four-year course. That excludes other expenses such as lab fees, computer rentals, and books. As a parent of a college aspirant, what can you do to help your child save money for his college education?

Perhaps you have heard of college savings plans. One of the best plans you can find is the 529 college savings plan. It is a savings account designed especially for college tuition and other related educational expenses. This plan is widely used as it allows you to invest money on a tax-advantaged basis. There are two types of 529 plans—the college savings plans and the prepaid tuition plans. The former are the plans that you can use for expenses at any college nationwide while the latter usually have age limits and oblige you to be a local of the state in which the plan is established.

There are quite a few other types of investments you can use to save money besides the 529 plans. You may use your Roth individual retirement account to withdraw retributions without acquiring a fraction of the withdrawal penalty. Additionally, you can use your permanent life insurance to cover your child’s school outlays. As an advantage, the cash value in a permanent life policy does not count as a liquid asset when universities determine how much financial aid your child is suitable for. 

Related posts: