The U.S. Department of Agriculture estimates the cost of raising a child to the age of 17 for a middle-income family will be about $285,000.1 That’s roughly equivalent to the median value of a new home in the U.S.2 And if you’ve already traded that supercharged convertible dream for a minivan, you can expect your little one’s college education to cost nearly $527,000.3
But before you throw your hands up in the air and send junior out looking for a job, you might consider a few strategies to help prepare for the cost of higher education.
As a parent, you teach your child to dream big and believe in their ability to overcome any obstacle. By investing wisely, you can help tackle the financial obstacles of funding their higher education – and smooth the way for them to pursue their dreams.
1. U.S. Department of Agriculture, 2020 (most recent data available)
2. The Washington Post, 2020
3. Wealth Management Systems, Inc., 2021 (based on average tuition and fees for a 4-year degree at a private university, starting in 2039 and assuming a 5% annual increase)
4. The rate of return on investments will vary over time, particularly for longer-term investments. Investments that offer the potential for higher returns also carry a higher degree of risk. Actual results will fluctuate. Past performance does not guarantee future results.
5. The tax implications of education savings programs can vary significantly from state to state, and some plans may provide advantages and benefits exclusively for their residents. Please consult legal or tax professionals for specific information regarding your individual situation. Withdrawals from tax-advantaged education savings programs that are not used for education are subject to ordinary income taxes and may be subject to penalties.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.