In 2018-2019, tuition and fees averaged $35,830 for private colleges, and $10,230 for in-state public colleges, according to Sallie Mae. It is recommended to start saving for college early on and the preferred savings vehicle we recommend is a 529 savings plan. Some of the benefits of a 529 plan are the following:
- Tax-free growth
- Tax-free distributions for qualified education expenses (including registered apprenticeships)
- Some states offer a state income tax deduction (not CA)
- Typically, minimal impact on financial aid because assets are treated as belonging to the account holder, not the student
- Tax-free withdrawals up to $10,000 for private, public, or religious elementary and secondary schools and student loan repayments ($10,000 lifetime maximum)
- The donor controls the account
- No income limitations
BFSG can manage client 529 accounts through my529 (Utah’s plan). If you want to find out more about 529’s or how to get started, give us a call.
