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By Teresa Stewart - December 14, 2018
In the frenzy of the holiday giving season, there's one unique gift idea you may have overlooked: contributions to a college savings account.
Practical gift-giving often gets a bad rap, but children can't break or outgrow a college savings account. A good education lasts a lifetime.
As college costs continue to rise, saving as much as you can before they graduate high school can make a big difference in their financial future. Tuition at public and private colleges has risen an average of 3.1% and 2.3%, respectively, each year over the past 10 years.1
Regular contributions can help keep pace with rising costs and put the benefits of higher education within reach.
If you're looking for a way to streamline gift ideas for others, the gift of college savings can be a smart option for friends and extended family members. Instead of getting all the latest games or gadgets, you could ask them to consider an account contribution instead.
And if you already have a 529 education savings plan account, it gets better. With the Ugift® service, anyone can transfer money easily and securely into a participating 529 account. Family and friends can make gift contributions directly into an account with electronic or mailed contributions. No fees, usernames or passwords necessary.
Don't have a dedicated college savings account yet? Learn more about the tax and savings benefits of 529 plan accounts. They're easy to set up and manage. And most have low minimum investments, so you don't have to save a large sum to get started.
Committing to an automatic investing plan is a time-tested strategy to grow money (including college savings) over time.
Set up annual gift contributions to a college savings account for holidays, birthdays or other milestones. You may also choose to invest your gift monthly to help smooth out ups and downs in the markets.2 Either way, automatic investing will help you stay on track toward your college savings goals.
Ugift also allows recurring gifts. Frequent gift givers can log in at ugift529.com to create a profile and set up automatic gift transfers from a bank account.
Starting at age 70½, retirees have a unique income stream that can help families boost education savings: required minimum distributions (RMDs) from retirement accounts.
For those who want to contribute to grandchild's or other student's education, these distributions can be a great resource for funding college accounts. It's also a way to help the next generation understand the importance of saving for long-term goals.
No matter the occasion, college savings contributions are a gift for the future. Find out how annual or monthly gift giving can help college savings grow.
Learn more about available investment options, such as 529 plans, or call us at 1-800-345-2021 to discuss your family's needs.
1 Trends in College Pricing 2018, College Board, October 2018.
2 This strategy, known as dollar cost averaging, does not assure a profit or protect against loss in declining markets. To fully take advantage of dollar cost-averaging, you should be prepared to continue investing at regular intervals, even during economic downturns.
Ugift® is a registered service mark of Ascensus Broker Dealer Services, LLC.
The gift of education invests in more than tuition, books or room and board. It invests in someone's heartfelt hopes and passions.
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The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.