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There is a university fee It’s more than doubled Over the past 20 years, as a result, families have struggled to properly plan their children’s higher education goals.
According to research by the Actuary Association, Six in 10 Americans He says he delayed his retirement to plan his family education.
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While many key factors determine the most realistic and cost-effective plans to pay the university, Tricia Scarlata, Head of Educational Planning at JPMorgan Asset Management, spoke about the Yahoo Finance decoding retirement podcast about how important it is for Yahoo Finance’s 529 account to meet capital goals.
“My goal is to always talk about not investing and potentially leveraging 529 accounts, if you’re not overlooking that tax-free growth and compound interest over time,” Scarlata said (see the video above or listen below). “Cash is not going to take you there, so investing and utilizing that tax-free profit is something we’re trying to encourage people.”
The 529 plan is a tax savings account that is particularly dedicated to saving on future education expenses.
It’s not just universities. These accounts can also be used to pay for trade school payments and to pay for tuition fees for K-12 education. The money in the account is then invested and becomes tax deferred revenue and compound interest used by the designated beneficiaries.
“Just looking at two accounts side by side, and non-taxable accounts side by side, everything is equal, earning $10,000 in advance, and then at the end of 18 years, you’ll get another $42,000 or more on your tax-free account.” “That’s a huge amount.”
read more: How much should I save before going to university?
By adding an education plan to your long-term savings goals, you can also avoid the temptation to borrow against your own 401(k) to pay your child’s tuition.
“There are a lot we found [parents] Skallata said, “I borrow to pay tuition against the retirees. “And that’s what I’m always worried about because when you start borrowing for a retirement or 401(k), what we see is that most people don’t contribute. In many cases, they miss that company match, and that’s free money.”
