Set a college savings goal early. Start as early as possible to improve your potential to grow your investments over time. As of 2024, national tuition averages for a four-year in-state school are $28,000, out-of-state school $45,000, private $60,000 and master's degree program $50,000.
Assess your investment options. Some options to consider are state-specific 529 plans, Roth IRA, Taxable Account, Coverdell Education Savings Account, Uniform gift to minors (UTMA) or a combination of these account types. Assess college savings account investment options with respect to performance, fees and tax efficiency. Tax efficiency is not the same for everyone, as it can vary based on annual income, your state and the type of college savings account.
Decide how much to contribute, and when. To start, consider a large lump sum to maximize time in the market or set auto monthly contributions. Be careful not to over contribute, as distribution from plans usually have penalties and limits.
Monitor and adjust your plan. Fund performance should be monitored to maintain growth and keep your plan on track. Funds, portfolios, fund managers and fees can change over time. Financial planning tools make it easier to set goals, determine contribution levels and monitor progress. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Jesse Waters is a registered representative with and securities and advisory services are offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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