Saving & Investing

Saving for College

After you pay down your debt, after you establish an emergency savings fund, after you start saving for retirement, your next big financial challenge is likely to be the college education of your children or grandchildren.

The earlier you can start planning for this, the better off you and your children or grandchildren will be. This is - or should be - a long-term commitment, so research it carefully.

Here are some tips to get you started:

The Florida Prepaid College Plan is guaranteed by the state of Florida. It allows you to lock in - at today's prices - the full future cost of tuition, fees and dormitory housing at Florida's public universities and community colleges. You can transfer the value of the plan to most private, technical or out of state colleges, though the value of the account may not offset the full cost of those schools. The price you pay is based on the age of the child when you start the plan. Contributions can be made in lump sums or fixed monthly payments. Withdrawals are tax-exempt.
529 plans: These state-sponsored accounts allow families to save for college while exempting earnings and withdrawals from federal taxes. You don't necessarily have to live in the state from which you purchase your plan. With these plans, you can build your own portfolios, though generally under the guidance of professional money managers. These investments are not guaranteed. You can use the proceeds at virtually any U.S. college and many schools abroad.
The Florida College Investment Plan is Florida's version of the 529 plan. You can distribute your contributions between five investment options, some more conservative than others. Minimum monthly contributions are $25. Rollovers from other 529 plans, qualified U.S. savings bonds, a Coverdell Education Savings Account, or transfers from UTMA/UGMA are allowed without incurring federal income tax or penalties. The fee for opening an account is $50 and anyone aged 18 or older can participate.

You can learn more about Florida's plans at: www.florida529plans.com/index.html

You can find a wealth of additional information, including online tools to help you calculate the cost of educating your children, at: www.savingforcollege.com

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