Finacial Services
How can I start saving today?
The cost of tuition, fees, and other expenses associated with college has been increasing in recent years and is expected to continue rising in the future. This means that the cost of a college education can be significant and can be difficult for many families to pay for out of pocket. Get started on investing in your child’s future today with our Smart-Save system.
Saving for college can be important for several reasons:
A college degree can increase earning potential:
According to data from the Bureau of Labor Statistics (BLS), the median weekly earnings for workers with a bachelor's degree was $1,248 in 2020, compared to $769 for those with a high school diploma but no college education.
College savings can reduce the need for student loans:
If a child has savings set aside for college, they may be able to use those funds to pay for some or all of their education expenses, which can help to reduce their reliance on student loans.
College savings can provide peace of mind:
Planning and saving for a child's college education can provide peace of mind for both the child and the parent.
The cost of college is rising:
- 2003-2004: $5,132 (in-state), $14,139 (out-of-state)
- 2013-2014: $8,893 (in-state), $22,203 (out-of-state)
- 2018-2019: $10,230 (in-state), $26,290 (out-of-state)
- 2020-2021: $10,560 (in-state), $26,820 (out-of-state)
What are your options?
There are several types of college savings vehicles to choose from, including 529 savings plans, prepaid tuition plans, Invest Through UTMA/UGMA Accounts and using the power of cash value of a life insurance policy. Let us help you find the best investment to prepare your child for a bright future.
529 Savings Plan
A 529 savings plan is a type of tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. The plans, legally known as "qualified tuition plans," are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. There are two main types of 529 plans: prepaid tuition plans and college savings plans. Prepaid tuition plans allow the account owner to purchase credits for future tuition at participating schools at current prices, while college savings plans allow the account owner to save for future education expenses such as tuition, fees, books, and room and board. Earnings in a 529 plan are tax-free as long as they are used for qualified education expenses.
Prepaid Tuition Plans
A prepaid tuition plan is a type of 529 college savings plan that allows the account owner to purchase credits for future tuition at participating schools at current prices. The idea is to lock in the cost of tuition at today's prices, so that the beneficiary can use the credits to pay for college when they are ready to attend.
UTMA/UGMA Accounts
UTMA (Uniform Transfer to Minors Act) and UGMA (Uniform Gift to Minors Act) are types of custodial accounts that allow a minor to receive and hold assets, such as cash, stocks, or mutual funds, until they reach the age of majority (which is 18 or 21 depending on the state). The assets in the account are legally owned by the minor, but a custodian, typically a parent or other responsible adult, is responsible for managing the account and making decisions about how the assets are invested until the minor reaches the age of majority.
Cash Value Life Insurance
Cash value life insurance is a type of permanent life insurance that includes an investment component that allows the policyholder to build up a cash value over time. Some people use cash value life insurance as a way to save for long-term financial goals, such as paying for their children's college tuition.