Seven in 10 college seniors, 68% according to the Institute for College Access and Success, had student loan debt. On average, that debt was $30,100 per borrower. And student loan debt is now the second leading form of debt in the U.S. behind mortgage debt.
With the cost of college rising, it’s a good idea to get started saving to avoid that debt as early as you can.
One great way to save is to start a 529 College Savings account. These state-sponsored plans are available in every state, and generally offer both current and future tax savings. With a 529 Plan, your investment grows tax-free, as long as the money is used to pay for qualified education expenses.
You might also consider opening a Custodial Roth IRA account. You can set aside or match 100% of a child’s wages up to $5,500 a year in that account. Contributions can then be withdrawn to help pay for college expenses.
Remember, don’t put saving for college in front of saving for your own retirement. College, even though it is expensive, is only four years. Your retirement is for the rest of your life.