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How Early Should You Start Saving For College

Aug 5, 2012

It's scary out there. The down economy continues and the uncertainty of its end is making many people fearful of what is to come. The worry about their jobs, the future their children will have, and if they will be able to get a job after college.

The cost of college tuition is going through the roof. A parent wants to provide for their child's education but can they really afford it. Student loans are not a particularly favorite thing that parents want to burden their children with. Saving for college is in a different environment today and it worries many parents.

According to the College Board's estimates, a four-year education at a state university will cost a whopping $201,000 in 2028.

The best thing to do is save for college and open a 529 account as soon as possible and invest in an age-based savings program. That means when your child is younger the plan will be more aggressive. The potential reward and risk will be higher, but as your child ages and gets closer to college, the plan will become more conservative.

Time is your best friend when saving for college. If you start a 529 plan when your child is born you have a minimum of 18 years to see it grow. Actually it is even longer because you only use part of it when your child reaches college age. You can continue to add money to your account as long as necessary.

Some extraordinary parents have even started a 529 plan years before their children were even born. This is a great idea because you can have the extra time for saving and growth. When they enrolled for the plan they just put themselves as the beneficiary and later changed it to the child's name when they were born. What a great birthday present!

Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Gmail.comWant to be heard? Leave a reader comment below.

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