It is hard to think of a single good or service that has not experienced considerable price hikes in recent months, fueled by double-digit inflation, economic uncertainty, and geopolitical tensions. Everything from groceries to airline travel to gas at the pump is higher than ever before, and one cannot help but wonder when things will stabilize. To compensate for these higher prices, consumers might delay certain purchases, buy less, or choose a different brand or model. But certain things should never be compromised or delayed, and a college or post-high-school education falls near the top of that list.
The Social Security Administration’s data shows that the average American’s salary increases by around 3.5% each year. The cost of college, however, has increased by 8-9% each year since 2000. In other words, the cost of college is doubling approximately every 9 years so when comparing the two growth rates, it’s no wonder why college costs are a hot topic and why many parents wonder how they will afford their child’s educational expenses. Fortunately for many parents, there are plenty of options for paying and saving for any educational expenses that come your way. We have outlined three different account types and the specific features of each account below.
Each account, when used effectively, can provide significant benefits for saving and paying for college/private grade school education expenses. While all have certain advantages, each account does have its drawbacks or limitations, meaning there is no one-size-fits-all account. Which account works best for you is highly dependent and varies upon your situation and goals for the savings. And just because you didn’t start planning the day after your child or grandchild was born doesn’t mean it’s too late. Paradigm can help you sort out all the details and create the best course of action for you and your child or grandchild’s education and savings. After all, it’s never too early or too late to begin planning and saving for education as “the best time to start was yesterday, and the second-best time is today.”