Antaeus Wealth Advisors Announce Top 10 Tips for Saving for College and Money Management While in College
BOSTON, MA – (June 10, 2014) – With graduation approaching, Antaeus Wealth Advisors announce their top 10 tips for saving for college, and money management while in college:
1. Find a way to fill up a Roth IRA
The maximum contribution is $5,500/year – assuming the student earns at least $5,500 – thus let’s assume a college student puts in $5,500 freshman year (age 18), sophomore year, junior year, and senior year (age 21). Then they add nothing for the rest of their life. By age 67, assuming a non-guaranteed average annual return of 8%, the ending balance is $857,473 – and tax free – all from just
$22,000 in contributions.
2. While in college, use one – and only one credit card – and pay it off every month
This teaches thrift, builds credit, etc. If a balance is rolled over to the next month – stop using the credit card until it is paid off. Build credit while having only one statement to watch. A no – fee card is best.
3. While in college, get a part-time job…
such as delivering food – and spend 50% of the money on fun, and save 50% of the money into a Roth IRA.
4. Budgeting is a critical life skill
Making a simple monthly budget and taking it is extremely helpful in college. A budget should have broad categories, so it is easier to maintain.
5. Get in the habit of paying yourself first
Dedicate a piece of your college job’s paycheck to savings. An amount as simple as $50/month establishes the habit of saving. In today’s electronic world this can be automated so your bank automatically moves the money into savings each month.
6. Get used to living within your means
7. All parents should fill out the Free Application for Federal Student Aid (FAFSA)
Retirement accounts, IRAs and equity in a primary residence generally do not count against the Expected Family Contribution (EFC) for financial aid purposes.
8. Parents should open a 529 as soon as the child is born to take advantage of compounding
Assuming the child starts college at age 18.5, the parents only have 222 months to sock money away before college begins.
9. These accounts may serve as a vehicle for grandparents…
and relatives to leverage their gifting goals in a tax-efficient manner. For example, provided that no additional gifts are made to the beneficiary over the 5 year period, any individual may contribute 5 years of
annual exclusion gifts to a 529 plan (i.e. $70,000 in 2014) in a lump sum without incurring federal gift taxes.
10. Paying off your house…
before your child starts college makes it much easier to pay tuition out of cash flow.
About Antaeus Wealth Advisors
Antaeus Wealth Advisors, a comprehensive financial services practice based in Boxborough, MA, offers a broad range of financial services to a variety of niche markets. Having served clients across market cycles and over generations, their team provides the resources and education for clients to make informed decisions with their money. By following the core values of trust, integrity and prosperity, Antaeus puts their clients’ interests first.
Antaeus Wealth Advisors, LLC, formerly Sohn & Associates, is a comprehensive financial services practice based in Boxborough, Massachusetts. Having served clients across market cycles and over generations, their team provides the resources and education for clients to make informed decisions with their money. By following the core values of trust, integrity and prosperity, Antaeus puts their clients’ interests first. Antaeus Wealth Advisors, LLC. 80 Central Street, Suite 150. Boxborough, MA. 01719. 978.264.9999. Visit here.