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April 30, 2019
It’s no surprise that college is expensive. Today’s estimated in-state cost of attending University of Florida for four years totals close to $85,000. Given recent inflation rates, that cost could easily reach over $150,000 by the time a newborn is ready for higher education. Factor in private schools or out of state tuition, and the numbers are even more extreme. Though these figures may seem daunting, consider some of the following education savings tips to be better financially prepared when college rolls around.
Setting up a monthly automated savings plan can be an easy way to start storing money away for that future need. Start with an amount you can afford and will stick to. Over time, consider increasing the amount you are saving when you receive a raise, bonus or pay off loans.
Compound interest can make or break a savings plan. An account making monthly contributions earning an average of 6% return on its investments annually could end up 64% larger than an account earning 1% over the course of 18 years. This extra boost could help you reach your goals sooner and more efficiently.
Grandparents and other family members are often interested in investing in your child’s future. Consider asking them to make a contribution to the child’s college savings account rather than adding to the never-ending pile of toys in the closet for birthdays or holidays.
With 529 Savings Plans, Prepaid plans, Coverdell Education Savings Accounts, and Unified Transfer to Minor Accounts (UTMA), there is certainly no shortage of options when saving for higher education. Two of the most popular options in Florida are a 529 Savings Plan, or a Prepaid Plan.
Both of these plans offer flexibility when the time comes to use the funds, including the ability to utilize the funds for more than one of your children.
Determining which option is best for you can be difficult, but you don’t have to make the decision alone. Work with a financial advisor to plan for this goal and many others.
Graham Rigby, CFP® – Financial Advisor
100 North Tampa Street, Suite 2400, Tampa, FL 33602
352-291-6711 – [email protected]
Graham Rigby, CFP® is a financial advisor at Rigby Wealth Management of Raymond James, which combined has 50 years of investment experience. Prior to joining the team, Graham worked at the Raymond James international headquarters in St. Pete, Florida as an education savings specialist.
© 2019 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.