As students head back to school, many families are focused on buying supplies, adjusting schedules, and preparing for another busy year. It's also a great time to think about a long-term goal that often feels far away until it's suddenly around the corner: paying for college.
Whether your child is just starting elementary school or preparing for high school graduation, having a strategy in place can help you feel more confident about the future.
Here are a few of the most common questions I hear from families.
Should I prioritize retirement savings or college savings?
Many parents want to do everything they can to help their children pay for college. While that's an admirable goal, it's important not to lose sight of your own retirement.
One principle I often share is that you can borrow money for college, but you can't borrow for retirement. Student loans and scholarships may help cover education costs, but there are very few options available if you haven't saved enough for your own future.
Finding the right balance between these two goals is often one of the most important conversations we have during the planning process.
Is a 529 plan always the best option?
A 529 education savings plan can be an excellent tool for many families because it offers tax-advantaged growth when funds are used for qualified education expenses.
However, it isn't the right solution for everyone.
For families who expect to qualify for significant financial aid, accumulating a large 529 balance may affect aid eligibility. On the other hand, grandparents may find that contributing to a 529 can be a valuable strategy, particularly when withdrawals are timed carefully.
There are also other education savings strategies that may make sense depending on your family's financial situation and goals. The best choice depends on your overall plan, not just the account itself.
How much should you be saving?
There isn't a one-size-fits-all answer.
The amount you choose to save depends on factors such as the type of school your child may attend, the projected cost of education, your family's financial resources, and your other long-term priorities.
Rather than focusing on reaching a specific dollar amount, it's often more helpful to create a savings strategy that's realistic, consistent, and flexible enough to adjust as circumstances change.
Is it ever too late to start?
One question I hear frequently is, "Have I waited too long?"
The answer is almost always no.
Starting earlier gives your savings more time to grow, but beginning later doesn't mean you shouldn't start at all. Even if your child is only a few years away from college, putting a plan in place today can still help reduce future expenses.
Some savings are almost always better than none.
Planning Today Can Make Tomorrow Easier
Back-to-school season is a reminder that children grow quickly, and college often arrives sooner than expected.
Taking time now to review your education savings strategy, evaluate your options, and make sure your plan still aligns with your family's goals can help you feel more prepared for whatever comes next.
Whether you're just beginning to save or simply want to make sure you're on the right track, having a thoughtful plan can help bring greater confidence to one of life's biggest financial milestones.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.