It may feel premature to start thinking about college tuition when your baby is still wearing a onesie: it’s not. College costs in the US have been rising for years and show no sign of slowing down. And in terms of opportunity, study after study has shown that a college degree is still the most reliable ticket to the American dream.1
The question is, how do you fund your child’s educational path? In 2016-17, state college tuitions were averaging $20,090 per year and private colleges, $45,370.2 Student loans will continue to play an increasing role in funding most future college educations, but planning and resourcefulness go a long way toward alleviating financial pressures. Additionally, any advice list has to begin with an “It’s Never Too Early to Start Putting Money Aside” message.
By looking at the future, you’re improving it
Monitor your financial plans at least annually. Many government limits, including income ceilings and tax allowances, do change over time – often for the better. The most important thing is to save money for kids’ college and to plan with optimism for your family’s future. Remember that the more time you give the savings to work, the more options you’ll be making possible for your kids.
1 Jennifer Ma, Matea Pender, and Meredith Welch. Education Pays 2016. The Benefits of a Higher Education for Individuals and Society, College Board
2 Trends in College Pricing. 2016 The College Board.
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A 529 plan is a tax-advantaged savings plan issued and operated by the state or educational institution that helps facilitate savings for college.
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