Celebrating College Savings Month: The importance of mapping out your savings roadmap

September is College Savings Month, a perfect time to reflect on the value of planning for higher education expenses. Let's talk about how smart preparation may help you secure a bright educational future for your child.

Potentially maximizing the benefits of a 529 plan

A 529 plan is a tax-advantaged savings account specifically designed for education expenses. Contributions to a 529 plan grow tax-free, and withdrawals for qualified educational expenses are also tax-free¹. This means every dollar you save may potentially work harder for you compared with a regular savings account. Additionally, many states offer tax deductions or credits for contributions to a 529 plan, providing even more incentive to start saving early and regularly.

SESO: Save early, save often

One of the most effective strategies to help ensure you are financially prepared is encapsulated in the principle of SESO: Save Early, Save Often. Starting to save for college as soon as possible may make a significant difference due to the power of compound growth—growth on growth.

To help ensure consistent savings, consider setting up automatic contributions to your 529 plan. This approach helps make saving effortless and may build a robust college fund over time. Learn how putting your CollegeBound 529 plan on autopilot may help grow your savings effectively over time by visiting Automatic 529 plan contributions | Invesco | Invesco US.

Ugift®: A thoughtful gift idea

Friends, family members, employers, and anyone else who wants to can contribute to a CollegeBound 529 plan using Ugift®, a free-to-use service. If you're looking for gift ideas this upcoming holiday season, consider suggesting contributions to a 529 savings plan for a child.

Here's how Ugift® works:

Unique code for each beneficiary

When you open a 529 plan, you receive a unique Ugift® code for each beneficiary. This code can be shared with anyone who wishes to contribute to the account.

Easy and secure contributions

Contributors can visit Ugift529.com, enter the unique Ugift® code, and make a secure contribution. Contributors don’t need to have access to the 529 account or any personal financial information.

Flexible gifting

Ugift® allows for one-time gifts or recurring contributions, making it easy for supporters to give according to their means and preferences.

Polite requests 

For those who might feel uncomfortable asking for contributions, Ugift® offers polite request options. You can send requests via email or social media platforms like Facebook and Twitter, making it easy to spread the word without awkward conversations.

Whether it's a birthday, holiday, graduation, or any other special occasion, Ugift® contributions make for a thoughtful gift that can help shape a loved one’s future. By involving friends and family in the college savings process, Ugift® helps create a community of support around the child's educational goals. This collective effort may make a significant impact on the amount saved for college.

Learn more about Ugift®.

Utilize Invesco's tools for college savings

Planning for college expenses can be daunting, but Invesco offers a valuable tool to simplify the process: college savings calculator. This tool is designed to help parents estimate how much they need to save to cover future college costs, considering various factors, including:

Child's age

The calculator considers the current age of your child, helping to determine the time horizon available for saving. The younger the child, the more time you have to benefit from compound growth on your savings.

Type of college

Whether your child plans to attend a public or private institution, the costs can vary significantly. The calculator allows you to input the type of college they may attend, providing a more accurate estimate based on current tuition rates and projected increases.

Cost increases

College costs tend to rise over time. The calculator incorporates projected annual increases in tuition and other expenses, helping you prepare for the expected cost when your child is ready to enroll.

Savings rate

By entering different monthly or annual savings amounts, you can see how these contributions will grow over time and how close they will bring you to your goal.

Customizable scenarios

You can easily run multiple scenarios to see how changes in savings amounts, timeframes, and college choices impact the total savings needed.

Using Invesco's college savings calculator provides a realistic roadmap for achieving your college savings goals. It can help you set a clear and achievable savings target, helping to ensure you’re financially prepared when the time comes.

By understanding and planning for the costs of higher education early, you can alleviate much of the stress associated with college financing and focus on supporting your child’s academic journey. Explore the college savings calculator today and potentially take the first step towards a well-funded college education for your child.

Additionally, Invesco's financial aid calculator can provide insights into financial aid eligibility and estimate your family's Student Aid Index (SAI), formerly known as the Expected Family Contribution (EFC). These tools can help you plan more effectively and better understand your financial position.

In summary, by leveraging the features of compound growth and the tax advantages of a 529 plan, you can potentially build a substantial college fund over time. Start as early as possible, set up automatic contributions, and take advantage of tools like Invesco's college savings and financial aid calculators. Your future college student will thank you.