Planning for College

With college tuition costs rising, the sooner you start to save for your children’s higher education the better.

A 529 college savings plan is a tax-advantaged investment vehicle operated by a state or educational institution that can help parents establish a college fund. While experts call these plans easy to use, some upfront planning and research can help ensure a child’s qualified expenses are covered. Authorized by Section 529 of the Internal Revenue Code, the 529 plans are operated by states or educational institutions.

Set a Savings Target

Before you open up a 529 plan, financial experts recommend you visualize the type of school you want your child to attend and then figure out the potential price tag to set a savings target. Next, evaluate your budget for how much you can afford to put away each month and set up automatic payments to help keep the process on track.

Enlist Help

Asking family members and grandparents can also help you reach your college savings goals. Instead of showering a new baby with toys and clothes, encourage relatives to put money in the 529 plan.

Finding the Right Plan

When it comes to choosing a 529 plan to invest in, financial experts say it’s not always advantageous to go with your state plan even with the tax write-off.

Parents should evaluate the performance of the plan, its fees and the type of investment choices it offers. Many 529 plans are age-based, meaning they invest aggressively when the child is younger and get more conservative the closer the child nears enrollment.

Our Ameritas Investment Corp. representatives and financial advisors are prepared to assist you in researching the features and benefits of the various funds available. Most plans offer several investment options from which to choose, ranging from conservative to aggressive, which is more prone to risk. You should also consult your tax advisor or attorney to help ensure you select a plan appropriate to your individual situation.

Wellness Opportunities

While getting college finances in order, remember to protect your collegiate’s health by providing regular dental, vision and hearing checkups. Many states allow parents to cover dependents up to age 26 (according to state law). Good health and wellness are important building blocks for a successful future.

529 Plans are subject to investment risk, including possible loss of principal. Before investing, carefully consider the investment objectives, risks, limitations, charges and expenses of the product. This information can be found in the product’s official statement. A copy can be obtained from your registered representative or from the product vendor. Please read carefully before investing.