Today, there are so many different ways to save for college. It seems so confusing and now I know why my four sisters struggle to find the best way for my eight nieces and nephews.
529's are by far the most popular choice. Are they good for everyone? Two of my four sisters use 529 College Savings Plans for their kids and are doing a great job with them. They have automatic deposits that go in, add money during bonus times and increased cash flow, and seem to be a good promoter of the plan during gift giving time. Let's face it, grandma's $10 cash gifts go a long way when your seven. However, the dent they make going into a 529 over 15 years is incredible.
One of my sisters is married to a finanical wiz. His version of a 529 plan is a well diversified portfolio that carries as many tax benifits as possible. I'm quite sure his college saving plan will do great and hope that it outperforms any 529. If you carry this expertise and have the time, private investing is a great choice.
And finally, the "good luck kid" approach to saving for college. Many adults have had to do it on their own. Scholarships, grants and loans are all great tools and resources. There is something to be said about "earning it, all of it"! Just know, college is expensive and is not getting any cheaper. My wife and I still pay her student loan after 12 years. It's a small loan and carries a 3.5% interest rate. Today the loans are way bigger as well as the interest rates. What was once a cell phone bill to pay off a student loan is now a mortgage payment.
529 plans are not for everyone but certainly for most. If helping your children save for college is your plan and you think a 529 is for you, ask for help. Ask your friends with kids. Read the plans available in your state. Make sure you know what is right for you first! And when all else fails and your still at a loss, ask a finanical professional.
Wayne Weber
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment