Monday, February 23, 2009

College Saving Tips

By Craig Rozelle

There are some very important things to consider when you have a child and are deciding how to save money for college. The first thing to consider is saving for your retirement is more important than saving for college. It is much easier for your children to secure sources of money then for you when you choose to retire. Secondly the sooner you start saving the better. Investing just $100 a month for 18 years will yield $48,000, assuming an 8% average annual return. Another tip is with tuition costs rising faster than inflation, a portfolio with more stocks are the best way to build enough savings in the long term. As your child approaches college age, you can shelter your returns by switching more money into bonds and cash. Next it is not necessary to save for all four years of college; there are many ways to supplement the money that has been saved. Taxpayers get a tax break with student loans, you may deduct the interest you pay up to $2,500 a year if your modified adjusted gross income is less than $65,000 if you're single or less than $130,000 if you're married filing jointly. The deduction can be taken for the life of the loan.

No comments:

Post a Comment