The New Year is a time for new beginnings and new resolutions.
Here’s one you should make right now.
If you are not yet using a college 529 plan to save for college, you should.
Leading investment research company Morningstar just released a new study that looked into how American parents save for college.
The conclusions are striking.
Morningstar estimates that by the time children are ready for college, American households would collectively have $237 billion more in assets if they had used 529 plans exclusively to save for those college bills.
For the average family saving for college, this means $4,044 more per child without saving an additional penny, concludes Morningstar.
Here’s the takeaways from the study:
- You leave money on the table if you fail to use a 529 plan.
- Families could save 25% less and still have the same amount available for college if they saved using 529 plans exclusively.
- 529 plans do have important tax benefits. But the real “magic” is getting people out of low-return checking and savings accounts and into the longer-term investments used by 529 plans.
Our clients know that we have been big believers in 529 plans since they were first rolled out back in the 90’s. We’ve set up 529 plans for our own kids and for more clients than we can count.
This Morningstar study is a huge endorsement of 529 plans and how they can make your college savings go further.
If you need help with your college savings strategy, or are wasting time and money saving in low-return bank accounts, make a 2019 New Year’s resolution right now to switch to a better way to save for college.
Grandparents: Did you know that one of the best ways you can help your grandkids is by helping to set up and fund a college 529 plan for them? Ask us how.