November 18, 2009
What to Invest in Now - College Investing
At last and easy question! I wish I could say that the answer was just as easy to take, but it's not, because academy costs continue to go through the roof. When I do a anticipate for anyone saving for college, whether it's for themselves later on or for their children or grandchildren, I predict the university tuition price increase rate to be no less than 7%, which is twice the average rise rate for the rest of the economy. So, the biggest and hardest part to get through is going to be how much you might have to conserve and how early you might have to start.
In my neighborhood, there are dozens of young families pushing around baby strollers. When I ask them about their academy savings, they let me know it's really early and they don't need to start yet.
If only that were true. So currently, in-state costs in the state of Washington is around 14,600 per year, that is including room and board. If you have a new child this year who will be starting in the fall of 2027, the cost then is closer to ,000 per year.
Even the state schools in some states are more expensive. DO not put this off even if it means having to a specific plan to you! What's the next thing to consider? Tuition and fees will be add to the cost when you get the money out as well! With a state-sponsored 529 plan, you can get your money back out to pay the bills as you need to with, get this, absolutely no federal income tax at all! What is really neat is you don’t have to live in the state that the plan is based in. "What do you mean, where the plan is based?" Every state has to sponsor at least one plan, and in most cases, they partner with one or more mutual fund companies to actually provide the 529 plan structure and the underlying investments. So, for example, you could live in California and set aside in the Virginia plan, or the New Jersey plan or the Arizona plan}. In some instances you can stay instate to take advantage of their plan, just know that is not the only deciding factor.
Ok so if you child does not go to seminary? That is fine. The state 529 plans I work with are accepted by any institution which accepts Federal Financial Aid. Should your child decide to be a Pilot or a Chef the funds are still there. One cool way to repurpose your money; if your children get scholarships you can take the matching amount from the fund and use it for anything you see fit. If he doesn't use it for undergraduate school, it's good for 30 years after high school graduation, so he could use it for a Master's program or a Doctoral program.
And if there's money left over when all is said and done? You can change the beneficiary of the plan to a sibling, or grandkids, or even to yourself, and use the remaining funds that way.
Filed under African American Scholarships by Cathy