Parents, when it comes to the cost of college, have you done the math? According to the College Board, the average yearly cost for tuition and fees for a public 2-year college (in-district) is $3,440 and a public 4-year college (in-state) is $9,410. If you’re unsure of how you’ll pay for your child’s education, consider a 529 college savings plan as we celebrate College Savings Day on May 29.
529 savings plans are commonly used to save for college because of the many benefits offered—the investments potentially grow tax-deferred and there are tax-free distributions for qualified education expenses. Plus, 529 savings plans have high contribution limits, are open to any income level and they provide estate planning benefits. The average saver utilizing a 529 college savings plan has saved $19,584, a record high for the savings tool.
Before you select a college savings plan, it’s important to do your homework. Consider all of your options—from 529 savings plans or prepaid tuition plans to custodial accounts, gifting or other tax-advantaged strategies and keep the following in mind:
No matter which college savings plan you choose, keep in mind the sooner you save, the better—even modest savings can add up over time. It might be difficult for families to save for all four years, but Busey encourages you to at least have a goal of saving for one year. Set up a systemic plan and incorporate it into your monthly budget.
From college expenses to financial preservation and retirement—prioritizing various financial goals is important. For many parents, the problem of saving for college and retirement at the same time is a reality. The key to saving for both is to tailor your monthly investment to the particular investment goal and determine your time frames and liquidity needs for each goal.
Our team of professionals can help you figure out how college savings fits into your unique financial situation. Celebrate 529 College Savings Day—and curb college costs with Busey. To start saving today, contact us or call 1.800.67 l Busey.
*Note: Investors should carefully consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about 529 college savings plans is available in the issuer's official statement, which should be read carefully before investing. Also, before investing, consult a tax advisor and consider whether your state offers a 529 college savings plan that provides residents with favorable state tax benefits.
Investing involves risk and you may incur a profit or loss regardless of strategy selected. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. You should discuss any tax or legal matters with the appropriate professional.
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc. Busey Bank, Busey Wealth Management, and Busey Investment Services are not registered broker/dealers and are independent of Raymond James Financial Services.
Busey Investment Services
201 W. Main St.
Urbana, IL 61801