CHICAGO, IL -- (Marketwired) -- 04/02/13 --
•Newly-launched BMO Wealth Institute helps Americans make better financial decisions •College tuition is growing at a faster pace than inflation -- averaging $16,510 for in-state public colleges and $27,600 for four-year private schools in terms of net price •Although 529 plans are the dominant college savings vehicle, Coverdell Education Savings Accounts and trust accounts offer other alternatives
With American high school seniors awaiting acceptance letters from colleges and universities, the BMO Wealth Institute today unveiled its inaugural report examining the common mistakes parents make when saving for their children's education, and highlighting the many benefits of 529 college education plans and other savings vehicles.
The most common mistakes include:
•Waiting too long •Not contributing consistently •Not taking advantage of 529 college education plans •Not being aware of all the college savings options available •Not managing the child's college decision
"We're committed to helping Americans step confidently into their future," said Stephen Williams, Vice President, U.S. Financial Planning Strategy, BMO Private Bank. "The goals of the BMO Wealth Institute are to assist clients in navigating the many challenges and opportunities associated with managing their finances and provide them with expert advice and guidance to tackle life's important milestones such as purchasing a house, saving for their child's college education, and preparing for retirement."
The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute's team of wealth planning professionals has deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.
Popular 529 Education Plans Address Skyrocketing Tuition Costs
The BMO Wealth Institute's inaugural report, titled Top Five Mistakes Parents Make Saving for Their Child's Education, reveals that parents and their college- or university-bound children face a double threat when paying for school:
•Tuition has been growing at a faster pace than inflation, with in-state students at public colleges paying $16,510 in net price on average and students at four-year private schools averaging $27,600 in net price for the current academic year. •The challenging job market is forcing many young people to return to school for a second degree which, in turn, incurs further costs and student debt.
"Parents have many competing financial priorities, so it may be difficult to accumulate education savings," said Mr. Williams. "But whether a parent decides to fund the entire cost of a child's education or part of it, it pays to maximize a 529 fund or other college savings vehicles."
The report outlines the important role of 529 college education plans. As the report explains, it is a smart way to maximize education savings because:
•It can be used for tuition, fees, room and board, textbooks, and necessary school supplies like computers. •Assets grow tax-deferred and can be withdrawn tax-free as long as the funds are used for qualified education expenses. •Parents or grandparents who own a 529 plan account maintain control of the assets, which can be beneficial for financial aid considerations and ensuring funds are used for college.
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