Identify Your Needs

What is the best way to save for my child’s education?

You are wise to start planning for your child’s future. According to recent surveys, the price of college tuition has increased more than 200% during the last 15 years . . . and that’s just the beginning. When you add the cost of textbooks, fees, room, board, transportation, supplies and a host of other financial burdens, the more money you can save now for your child’s college years, the better.

Fortunately, your Raymond James financial advisor offers various investment options that help your money keep up with - or surpass - the increasing cost of education. No matter what your financial circumstance may be, he or she can discuss various tax-advantaged investments and recommend a plan for your child.

Devise an investment strategy based on your child’s needs

Before deciding on which investment account is best suited for your needs, you and your financial advisor should discuss your goals, then determine your risk tolerance and time horizon.

• Define your goals clearly. Do you want your child to have the opportunity to attend a two-year or four-year college? Vocational school? Public or private? How much might these schools cost by the time your child is ready to attend? The answers to these questions will help you ascertain how much you’ll need to save.
• Determine your time horizon. Since your child is a newborn, you have almost 18 years before assets are needed to fund his or her college education. Time horizon is an important factor used to determine how aggressively you may invest your assets.
• Choose an investment strategy. Once you know your goals and time horizon, you can evaluate your risk tolerance against your potential reward and decide how to invest the account’s assets. For example, since your child is very young, you may want to select longer-term, higher-risk investments, such as stocks or more aggressive mutual funds.
• Start a plan. Whatever investment strategy you choose, the earlier you begin the greater your potential rewards. Preparing to save now - while your child is young - gives you time to invest more. It also gives your investments more time to grow through compounding, allowing you to earn income not only on the money you invest, but also on the income you’ve already earned.

Choose the alternative that’s right for you and your child

Although many education plans seem similar, there are critical differences. While all of these plans are set up to help you pay for higher education, one may be more suitable for you, depending on factors such as how much you plan on contributing or your personal income. Consult your financial advisor to find a plan that fits your needs.

Contact your financial advisor and prepare for the future

As a new parent, there are many things you can do to help your child through his or her early years, but making sure your child has access to the learning opportunities necessary for a bright future is a gift for life. To discuss enrolling in a college savings plan, contact your financial advisor or use the Office Locator to find our office(s) nearest you today