Investing in Your Child’s Future

Education Planning: By the Numbers

  • $38,300 — Average cost for 4 years of tuition and fees at an in-state public university 1
  • $129,700 — Average cost for 4 years of tuition and fees at a private university1
  • $58,400 — 2011 Median earnings of full-time workers over 25 with a bachelor’s degree2
  • $34,400 — 2011 Median earnings of full-time workers over 25 with a high school diploma2
  • 37% — Households under age 40 that had outstanding student debt in 20103

1 The College Board®
2 Educations Pays, 2013.
3 2010 Survey of Consumer Finances, Pew Research Center

Paying or helping to pay for their children’s college education consistently ranks as a high priority for many American families, and with good reason. Despite the rapidly rising cost of college, statistics continue to show that the long-term value of a degree makes it a prudent investment. College graduates are more likely to be employed, make substantially higher incomes and are nearly twice as likely to receive employer-provided healthcare and retirement benefits as those without a degree.1 According to a paper2 written by a prominent MIT economist, the true cost of a college degree is about negative $500,000. In other words, not going to college will cost you about half a million dollars.

Put Time On Your Side

There’s no shortcut when it comes to investing for college – but you can significantly increase your chances of achieving your objectives by beginning to save and invest as early as possible. In fact, assuming they invest the same amount of money and earn the same rate of return, parents who begin investing for college when their children are born will accumulate roughly twice as much by the beginning of their freshman year as parents who put off investing until their children’s sixth birthday.

Starting Early with College Savings

Maximize Your Resources

Maximizing your resources through smart, efficient investing is just as important as getting started early. Fortunately, several attractive tax-advantaged investment options exist for funding future education expenses, including:

  • Qualified tuition programs, also known as 529 Plans*, offer tax-deferred earnings and tax-free distributions for qualified college expenses like tuition, room and board and books.
  • Coverdell Education Savings Accounts (ESAs) offer similar tax advantages not only for qualified college expenses, but for qualified elementary and high school expenses.

Talk To Your Financial Advisor

There’s no better time to begin planning for tomorrow’s education expenses than today. In addition to helping you set specific goals and helping you determine which of the various investment options will best meet your needs, your First Command Financial Advisor can:

  • Provide guidance on how to properly allocate and diversify your investment dollars
  • Explain how money you set aside for college may impact the availability of financial aid
  • Help you prioritize your investment dollars if time is short or funds are limited
  • Build a customized plan that takes all of your objectives into account

*Prior to investing in a 529 College Savings Plan, you should compare the Plan with any 529 college savings plan offered by your home state or your beneficiary's home state and consider, before investing, any state tax or other benefits that are only available for investments in the home state's plan. Please read the Plan's Disclosure Document which includes investment objectives, risks, fees, charges and expenses, and other information. You should read the Plan Disclosure Document carefully before investing. For this and other information on any 529 College Savings Plan, contact First Command at 800-443-2104 or your Financial Advisor. Please note that the availability of tax or other benefits may be conditioned on meeting certain requirements such as residency, purpose for or timing of distributions or other factors as applicable. As with any investment, it is possible to lose money by investing in a 529 College Savings Plan. Information provided is for general purposes only and is not intended to be a substitute for specific individualized tax or legal advice. Where specific advice is necessary or appropriate, please consult a qualified tax or legal advisor.

1Trends in Higher Education Series - Education Pays 2013.” The College Board, 2013.

2 Skills, education and the rise of earnings inequality among “the other 99 percent,” published in the journal Science, May 2014


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