There are many choices to consider when saving for college, but charting a course for college savings solutions is the best first step you can take. Most families will pay for college using a combination of sources, which can include savings, present income, pre-purchase of tuition and other sources such as grants and financial aid, including loans.
The course a family chooses depends on how many years the family has to save before the student enrolls, as well as the family’s overall goals and investment preferences. With college costs continually on the rise, now is the time to begin researching and comparing options for saving for college.
Here are a few options to get you thinking about which college savings plan might be the best for you:
- Private College 529 Plans
- State Sponsored 529 Plans
- Coverdell Education Savings Accounts
- Custodial Accounts (UGMA/UTMA)
- Educational Savings Bonds
- Roth IRA
For a more in-depth chart comparing the many college savings options click here.
This blog was provided by Lloyd Leanse, Managing Director of Prager & Co. and member of the board of directors of Tuition Plan Consortium, LLC, who was a guest on College Smart Radio “Tackling the Runaway Costs of College,” on January 5th, 2013. Listen to this broadcast on YouTube: Part 1 – Part 2.
Photo Credit: Tax Credits