Client Letter | The Importance of College Savings: A Smart Investment in Your Family’s Future | September 3, 2024

As we celebrate College Savings Month this September, it’s a perfect opportunity to highlight the importance of planning ahead for your loved ones’ education. With college costs on the rise, starting a dedicated savings plan can significantly ease the financial burden on your children and grandchildren, providing them with greater freedom to pursue their academic goals without the worry of mounting student debt. Here are some key reasons to start saving now:

1. The Power of Early Saving: The earlier you start saving, the more time your investments have to grow. Even modest contributions can compound over time, making a significant impact on the total savings available when it’s time to pay for college.
2. Tax Advantages: College savings plans, such as 529 plans, offer valuable tax benefits. Contributions may be tax-deductible at the state level, and the earnings grow tax-free as long as they’re used for qualified education expenses. This can help your savings stretch further, reducing the overall cost of education.
3. Supporting Your Grandchildren: College savings aren’t just for parents—grandparents can also play a crucial role in their grandchildren’s education. By contributing to a 529 plan or setting up an account in your grandchild’s name, you can provide a lasting legacy that supports their future, easing the financial load on the entire family.
4. Versatile Education Options: College savings plans are not limited to traditional four-year universities. Funds can often be used at community colleges, vocational schools, and even for certain K-12 expenses, offering flexibility to support various educational paths.
5. Reducing Future Debt: By saving in advance, you can help your children or grandchildren avoid the burden of student loans, allowing them to start their careers on a stronger financial footing.

Investing in your family’s education today can bring lifelong rewards. If you’re considering starting or enhancing a college savings plan for your child or grandchild, we’re here to help you explore your options and create a strategy that aligns with your goals. Reach out to us to learn more—because every contribution counts when it comes to shaping a brighter future for your loved ones. As always, if you have any questions or we can be of assistance, please feel free to reach out.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. (19-LPL)