This month, the education community celebrates Financial Aid Awareness Month often by sharing information with students and families about access to federal, state, and institutional student aid. College and higher education costs can sometimes be steep costs to families. However, a college degree can be important in providing opportunities in young people’s careers, so it sometimes falls on the whole family to pay for the important cost of education.

Financial aid is a crucial piece of the college planning puzzle. For those who seek a college degree but face difficulties in paying for it, financial aid is their ticket to career success. It opens their options for what level and type of education they can receive, and in some cases, is a necessity for economic mobility.

Regardless, higher education will likely cost you something whether you receive financial aid or not. The good news is that there are savings plans available for you, just like your retirement or health savings accounts, that can help you save for a kid’s or grandkid’s college.

The 529 savings plan is a specific type of savings and investment account that is tax-advantaged for qualified education spending. It covers items such as tuition payments as well as other expenses associated with academic activities, such as the purchase of school supplies. But just like an IRA or 401(k), starting the saving process earlier is often advantageous.

The financial aid filing process happens when applying for college, but the college savings process happens much sooner. That’s why it’s crucial for families to include college and education planning in their financial plan, in addition to seeking advice and guidance on the financial aid administrative process from qualified education sources and professionals.

 

When it comes to education saving and spending, including a financial advisor in your family’s college planning process can help you optimize the college spending process so that you put yourself and your family in the best position to provide quality educational opportunities to your family while keeping your financial and retirement goals and needs intact

 

Securities offered through DAI Securities, LLC, member FINRA/SIPC.  Advisory services offered through DAI Wealth, Inc.., an SEC Registered Investment Adviser. DAI Securities, LLC and DAI Wealth, Inc. are separate, but affiliated, entities. This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.

 

Source: https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan