According to recent studies the average cost for one student to attend one year at a private college is about $40,000. The cost of a four-year college education for just one child could end up costing a whopping $160,000 in today’s dollars. That does not account for inflation for tuition. Don’t let the numbers scare you too much, because with the proper planning, and automatic long-term saving in vehicles like 529 Education Saving Plans, these nightmare numbers can turn into more manageable numbers.
A 529 plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.
The money can be used to meet costs of qualified colleges nationwide, and in most plans your choice of school is not affected by the state that your plan is coming from. For instance, you can be a resident of New York, invest in a Vermont plan, and send your child to college in North Carolina.
Be sure to check whether or not your institution is eligible here. Note that every state now has at least one 529 plan available, but the plans can differ from state to state. You can research each state’s 529 plan options here, and can even compare between the plans here.
For more information about 529 plans, or to discuss education planning in general, please contact us to schedule a complimentary consultation at 631.218.0077, or via e-mail at firstname.lastname@example.org.
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