Ah, the pain of college-bound parents.
The just-released 9th annual National Survey “College Savings Indicator Study”Fidelity Investments’ survey found that while parents are now saving more money to pay for college, a staggering 69 percent of them do so nationwide, up 5% from last year. However, they still need to save just 27 per cent of the goals they have set by the first year.
Even non-math whizzes are able to see what the description is. “the challenge ahead”These numbers suggest that $232 is the median monthly amount parents save and $31,231 is the current average annual cost for tuition and fees at private colleges.
The behavior of millennial parents may be particularly interesting.
This generation was born between 1981-1997. Their particular revelation in the 2008 recession was how difficult it is to pay off student loans while trying establish a career. Only 56 percent of those who graduated with this debt still have it. It’s not surprising, then, that 56 percent of those who graduated with such debt still have it. “appear particularly determined to help their children”You can avoid this plight by making sure that your parents plan to pay 8 percent more than the 66% of their offspring’s college expenses than they do overall.
“Millennials have weathered challenging conditions for much of their adulthood, and have adopted smart savings habits at a higher rate than their older counterparts,”Keith Bernhardt, Fidelity’s vice president for retirement and college products, said:
Here are some ways to ensure your children’s higher education is not underfunded.
* Consider opening a 529 Plan. Survey results show that 93% of parents who have one of these state-or state agency-sponsored, college accounts say it keeps them on track. These savings can be used to pay for tuition, books and other education-related costs. The best part is: The best part? Federal income taxes can be deferred for any earnings. Separate state tax deductions might also apply.
* Get with the trend. Have you heard of wedding registryies that are set up to finance a honeymoon in exotic Bora Bora? It’s the exact same for college. It’s free if you have a 529 plan through Fidelity. 529 Online Gifting ServiceAllow family and friends to contribute to your account. You will have a private dashboard that allows you to track gifts, send invitations, and track them.
* Reallocate pre-school dollars. You can save $730 per month on your child’s monthly fees if they have outgrown daycare and afterschool care.
Another finding from the study is that 70% of parents feel they need more. “guidance”You can find out more about the subject. Interactive, online Fidelity resources are some of the most popular. College Savings Quick CheckThis allows you to see your progress.
