4 Things You Need to Know about Saving for College

1. Start early and invest regularly.
Any investment advisor (or mathematician) will tell you that if you want to save money for the future, start investing early. You'll give yourself a greater opportunity to reach your goal based on the increased amount of time you can let your money grow. And, with a 529 college savings plan like the Learning Quest® 529 Education Savings Program you can get started with as little as $50 a month. Visit learningquest.com for more information.

2. Diversifying your investments may reduce your risk.
Investing in a portfolio like the ones offered by the Learning Quest 529 Education Savings Program means you automatically gain exposure across different asset classes. Though diversification does not ensure you won't lose money, it may be one of the keys to reducing your risk from any single investment.

And, when you choose an age-based portfolio for your college investing dollars, the professionals at American Century Investments automatically reduce your exposure to more risky asset classes as you get closer to needing your money to pay for college. Visit learningquest.com for more information.

3. Scholarships and financial aid can help, but at a price.
It's important to remember that there can be a significant difference between the cost of borrowing money later to pay for college and investing today for your child's future. Let's say you need $100,000 to pay for college, here's how that difference could play out.

Hypothetical College Savings Goal: $100,000
Investing Borrowing
Invest Monthly for 18 Years at 8% = $100,000 Take Out a Loan Repayable Over 10 Years at 7% = $100,000
Monthly Contribution=$207 Monthly Payment=$1162
Total Contributions=$44,712 Total Cost=$139,440
Cost of Borrowing vs. Cost of Investing: $139,440 - $44,712 = $94,728

This information is for illustrative purposes only and is not intended to represent any particular investment product.

4. Enlisting others in the effort benefits everyone.
Grandparents or other relatives can contribute to an existing 529 account or open a new one. Either way, they receive the tax benefits and your child gets more money for college.
Visit learningquest.com for more information.

Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor and Underwriter, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.

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.

The earnings portion of non-qualified withdrawals is subject to federal and state income taxes and a 10% federal penalty.
As with any investment, withdrawal value may be more or less than your original investment.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.