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The cost of college weighs heavily on many Americans. Here are four reasons families should consider 529 plans.
It’s no secret that higher education is valuable. People who have a four-year college degree will earn, on average, twice as much as those with only a high school diploma.1 But higher education is also expensive — the cost of attending over four years already exceeds $100,000.2
Given that most people need to plan for rising higher education costs, how are they saving for college expenses? When we look at a breakdown of assets across the most popular college savings vehicles, 529 plans are the largest single category, but 70% of college savings assets are still held in other types of accounts. Given the powerful tax advantages of leveraging a 529 to plan for college, this is a lost opportunity.
529 plans are a powerful way to save for college.
529 plans are designed to make investing for college easier by providing tax advantages that aren’t offered by any other education savings vehicles.
Saving for college can be challenging, and it’s important for families to plan for this future expense with their financial advisor. A tax-advantaged 529 plan could help offset the widening gap between family income and future college costs.