HOW SHOULD I APPROACH INVESTING FOR COLLEGE?
Whether you’re saving for yourself or for a child, you need to have the money in place before you register for classes. Your investment plan will vary depending on the amount of time you have before the first day of classes—so get started today.
Uncover college costs.
While there are many ways to cover the costs of college, the majority of students use a combination of funding from savings, student loans, scholarships, and part-time jobs. Don’t forget to factor in the costs of housing, books, food, insurance, and entertainment. You need to save enough money to cover all of the costs, not just your tuition and books.
College Planning Guide
Save for a child.
Start early to take advantage of compounding. Most financial experts suggest opening a college account when the child is born. Another choice to consider is the benefit of saving in the child’s name—the first $700 is tax free, the next $700 is taxed at the child’s rate, and anything over $1,400 is then taxed at the parent’s top marginal rate.
Savings Accounts
A savings plan is an important part of any financial strategy and Wachovia offers savings and money market accounts to help you build a solid financial future. A savings account is a safe place to keep your money and earn interest.
Wachovia Savings Account Products
Asset Management Accounts
You can gradually build a portfolio with an extensive range of accounts and services, all available through one convenient investing and banking relationship.
Wachovia Securities Asset Management Accounts
Education Savings Account
The Coverdell Education Savings Account (formerly the Education IRA) is a popular way to save for a child’s education. Plus, anyone can contribute—so if a grandparent wants to put a little extra in at birthday time, it’s easy to do. These accounts allow contributions of up to $2,000 a year, per child. Withdrawals are tax-free and penalty-free as long as the account is used for education expenses before age 30. Other benefits include flexibility to use the funds for kindergarten through college and the opportunity to invest in a variety of stocks, bonds, and mutual funds.
Coverdell Education Savings Account
529 Savings Plans
529 plans provide tax-deferred earnings towards qualified education expenses like tuition, room, and board. These plans also allow gift-tax exclusions under certain circumstances and can offer special advantages for estate planning purposes. 529 plans offer flexibility in terms of both choice of college and investing choices.
CollegeSense® 529 Higher Education Savings Plan
Work with a Financial Advisor.
If you’re unsure about which college savings program is right for you, consult a Wachovia Securities Financial Advisor. Working with an advisor can help you assess what type of savings choices to explore—stocks, bonds, mutual funds, and more. If money is tight, your advisor might suggest setting up a Systematic Investment Plan (SIP) so that money is drawn monthly from your account into a money market account or invested in a mutual fund earning higher interest rates. SIPs can be set for as little as $50 a month, so almost anyone on any budget can start to save today.
Locate a Financial Advisor at a Branch Near You
Save for returning to college.
Whether you’ve decided to attend college or return to college, we can help you get your financing into place quickly so you can focus on the real goal—your degree. Spend some time planning how much money you’ll need and how long it will take you to complete your coursework.
Other Sources of Funding
If you are getting a late start on savings, you may want to consider ways to get your money working faster like a money market account, investing in stocks, or mutual funds. If you’re returning to school and you own a home, you might want to consider a home equity loan since the interest rates are usually less than those of traditional student loans. Additionally, you’ll want to consult with your tax advisor to research what tax benefits you can gain from saving for educational costs.
Wachovia Securities Asset Management Accounts
Wachovia Home Equity Loans
Wachovia Securities Brokerage Account
Wachovia Savings Account Products
Scholarships and Financial Aid
Even if you think that you’re ineligible for financial aid, fill out the applications and mail them in on time because you never know what you might qualify for in financial assistance.
Scholarships are another great source to supplement tuition costs. Go to the college’s financial aid office and ask about applications or search for scholarship information online.
More Information on scholarships and education-related loans
Federal and State College Financial Aid Programs
Work Study and Part-Time Jobs
Many students find that working part-time is a practical and great way to offset the cost of college life. Ask about work-study programs at your college’s financial aid office or see if your campus has a college job resource for internships and local employers. If your schedule is too intense for year-round employment, line up a summer job to sock away money for the rest of the year.
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