It’s never too late or too early to start investing in the future of our kids. No matter where you are financially or what educational paths your child takes, considering an education savings plan will help give you the best start to enrich the lives of your most cherished family members.

Benefits of an Education

We all know the importance of an education but putting actual numbers to that statement helps show that pursuing a higher education offers better job security and an increase in earnings potential. Consider this data from the US Bureau of Labor Statistics1.

  • Average income based on level of education (for people over 25):
    • High school diploma = $38,000
    • Vocational school = $42,000
    • Associate’s degree = $45,000
    • Bachelor’s degree = $62,000
    • Master’s degree =$75,000

 

  • The unemployment rate decreases as level of education rises, from 4.1% among high school graduates down to 2.1% among those with a postgraduate education.

 

Total Cost of an Education

There are different types of post-high school education programs, each with their own range of expenses. While everyone considers the price of tuition per year, other costs like books, supplies, housing, meals, and transportation need to be factored in as well. The type of school will also affect total costs, with options from vocational schools, public/private schools, in-state/out-of-state schools, etc. Total expenses can range from $9,000 (vocational school) to over $50,000 (private four-year college). While you might not know what kind of school your child will choose, an education savings plan will prepare them for any type of post-high school education.2

Of all the available data on getting a post-high school education, one fact remains certain: tuition fees rise. Tuition increases 3%-5% annually. That might not seem like a lot but consider that increase over the course of 18 years, not including the other costs of an education. With the ever-rising cost of a post-high school education, you’ll be able to give your child a bigger boost in college savings if you start an education savings plan early. 2

 

Building an Education Savings Plan

There are many ways to plan and invest in the future of your child. A thoughtful savings plan is achievable on any budget. Whether you want to plan on your own or get help from a financial professional, here are a few things you can do now:

  • Assess your financial health. Take inventory of your personal and professional goals see how much savings you can use to invest in an education plan.
  • Connect with resources. Whether you want to set up an education savings plan on your own or with some help, there’s a wealth of information out there from financial websites, government resources, or financial professionals.

Less than half of American families have a plan for education savings. Families that plan borrow significantly less money than non-planners. Learn more about the opportunities for saving for college and equip your kids with the tools they need to build a bright future.

1Source: Bureau Labor of Statistics, 2018. Average earnings and unemployment rates are for the year 2019.

2Source: College Board. “Trends in College Pricing 2019,” 2019. Vocational school data provided by rwm.org, 2020. Trade school costs vary by specific trade.

 

 

NA1919

Not a Deposit   Not FDIC Insured  Not Guaranteed by the Bank  May Lose Value  Not Insured by any Federal Government Agency

Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.
 
For more information about CollegeBound 529, contact your financial advisor, call 877-615-4116, or visit
www.collegebound529.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Invesco Distributors, Inc. is the distributor of CollegeBound 529.

Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.

Invesco Distributors, Inc. does not provide legal or tax advice. This information is provided for general educational purposes only and is not to be considered legal or tax advice. Investors should consult with their legal or tax advisors for personalized assistance, including information regarding any specific state law requirements.

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