How to start saving for college

Back to School

Over the past 20 years, Financial Advisor Greg Reynolds has worked with hundreds of families to help make their college dreams a reality, but he says it’s a process that requires a major commitment for success. “Even for a two income household it’s something that you have to be very disciplined with in order to accomplish the goal.”

On average college costs have risen about six-percent a year for the past decade with no end it sight. Reynolds says that trend puts a premium on starting early. “You really can’t start too early. It’s an enormous expense”. The best way to get started is to enroll in Indiana’s College Choice 529, a savings plan with a 20-percent tax credit. “On a 5-thousand-dollar contribution, which is the maximum you can contribute and still get the 20-percent, that’s a free thousand dollars.”

That money grows tax free and comes out tax free for qualified education expenses. “It’s important to note that even for higher education purposes it can be used for two year schools, four year schools, technical schools, or trade school.” Reynold says “It’s not just for a four year university experience that this money can be utilized for.”

Starting small can have a big impact over the long haul. Reynolds stresses the importance of setting up an automatic withdrawal for long term success. “That process tends to be extremely important for most folks. When you’re forced to actually write a check every month or log-in and make a payment, it often gets missed or forgotten. But, when it’s automated we see a much higher success rate because it comes out of the account over and over again and gradually builds the nest egg to be used for that educational experience.”

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories

Don't Miss