You don't need a Ph.D. to know that a college degree is important -- and expensive. One year at a public in-state college will set a family back an average of $17,131, while a private school will cost an average of $38,589, according to the College Board. And a child born today could cost more than $400,000 to educate at a private college for four years if college costs continue climbing at the rate they have.
"The most important thing is to start saving when your kids are young," says Deborah Fox of Fox College Funding in San Diego, which advises families on how to pay for college.
But even if you didn't start saving early, you can take some of the sting out of paying for college by participating in tax-saving programs. Consider these:
Before investing, investors should consider whether their home state or their designated beneficiary's home state offers any state tax or any other benefits that are only available to residents of that state. Any state tax benefits associated with a 529 plan apply only to residents of the state sponsoring the plan. 529 plans value will fluctuate so that an investor's shares, when redeemed may be worth more or less than their original cost.
Investors should consider the investment objectives, risks, and charges and expenses of the plan carefully before investing. An official statement, which contains this and other important information, can be obtained from your financial professional. Please read carefully prior to investing.
Withdrawals may be subject to state income taxes depending on the participant's state of residence. Non-qualified withdrawals are subject to a 10% penalty.
Participation in a 529 plan does not guarantee that contributions and the investment return, if any, will be adequate to cover future tuition and other higher education expenses or that a beneficiary will be admitted to or permitted to continue to attend and institution of higher education.
SunTrust Banks, Inc., nor any of its affiliates underwrite 529 plans.
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