Explore your college planning options

If you have young children or grandchildren and you're wondering when the right time is to start saving for college, the answer is now.

If college costs keep rising as they have for the last three decades, the inflation-adjusted price of four years of tuition alone could more than double by the time your children or grandchildren are ready for college. In 2027—when a current first grade student could be heading off to college—the average cost of a four-year college education at an out-of-state public university could be as much as $327,607 and the cost at a private university as much as $424,173.*

With college tuition increases often outpacing the rate of inflation and increases in family income, it’s more important than ever to start saving for your children’s and grandchildren’s college education.

529 Plans

If you start saving early, you will be in a better position to meet college costs. One of the best savings vehicles available is a Section 529 College Savings Plan (named after the portion of the IRS code that authorizes these accounts). The features of a 529 Plan include: 

  • the potential for significant tax benefits;
  • the ability to contribute large amounts;
  • possible estate planning benefits;
  • you control withdrawals; and
  • flexibility.

Setting up a custodial account

Another method you may want to consider is setting up a custodial account as established by either the Uniform Gift to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). This type of account can offer you investment flexibility and tax advantages.

The Uniform Gift to Minors Act (1956) or the Uniform Transfer to Minors Act (1986) provides a way to structure accounts owned by children. Essentially, UGMA/UTMA allows you to fund an account for a child, but limit the child's access to the account until he or she reaches the age of majority—typically, either 18 or 21. The child owns the account, but you are named as custodian, and you control the account until the child is no longer a minor. At that point, the custodial relationship ends and the child assumes control over the account.

Some other key features include:

  • potential investment tax advantages;
  • investment flexibility;
  • high contribution limits; and
  • possible reduction in estate taxes

Contact us for more information regarding these and other investment options and solutions.


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