Money Matters: Planning to pay for college
COLUMBIA, S.C. (WIS) - As the cost of a college education continues to rise, many parents wonder how they’ll pay for it when that time comes for their children. Josh Bradley of Capital City Financial Partners offers a few helpful strategies.
When should parents begin to plan for that high cost of college?
“When you’re planning for college, time is against you. The cost of college doubles almost every nine years so ... we encourage people to put that time on your side and start as early as possible. Putting in even a little amount as they’re really young, it’s going to pay off big time as they get toward college,” Bradley said.
What strategies does Bradley recommend?
“The first thing I encourage people to do is make sure your financial house is in order; your retirement plan is in place, your debt is in a good place, you don’t want to go broke paying for your kid’s college. The second thing is work with your kid to establish a budget that you’re willing to contribute to college. We see this a lot where a kid gets into their favorite school and all of a sudden you look at the bill and you’re committed, and you have to make it happen. Kids are really smart, tell them what you’re willing to spend and they’ll help and work to go to a school that fits within your budget. The third thing is, with potential student loan forgiveness programs coming out, taking on some student loans is not a bad strategy right now. The last thing is to go and start establishing a 529 plan,” Bradley said.
What exactly is a 529 plan?
“You can get 529 plans across multiple platforms, however, the one we usually recommend for folks is the Future Scholars 529 plan, the South Carolina plan. Primarily the reason is you get a state income tax deduction when you put the money in, so it helps you a good bit each and every year, and then when your child pulls it out for school it’s tax-free, so tremendous benefits either way. The other thing we hear is what if my kid doesn’t go to a South Carolina school? It doesn’t matter, it matters the residency you’re in now,” Bradley said.
To speak with Josh Bradley or any advisor at Capital City Financial Partners, visit this link.
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