Investing in a Great Future, Oregon College Savings Plan
Money Matters: Better Planning and Investing
By Founder and Managing Member Christian Kruse, CFP®
With the fall season here, and the Beavers and the Ducks playing football on many of our TVs, some parents and grandparents’ thoughts turn to the rising cost of tuition.
As many of us know well, the cost of attending a four-year college or university has increased dramatically over the past several decades. An article from Best Colleges notes that for four-year public colleges, the rate of inflation from 2001 to 2021 tuition and fees rose 5% per year.
A single year at the University of Oregon is approximately $57,000 when including Tuition, Books, Room & Board, and other expenses. My own alma mater of Oregon State is only somewhat lower at $49,000 per year.
These expenses can seem daunting or even insurmountable without going deep into debt.
A 529 Savings Plan allows you to grow wealth for future education expenses. Gains grow tax deferred like an IRA and can be withdrawn tax free for qualified expenses like tuition, books, room and board as well as computers and supplies.
Each state has its own college savings plan but that does not mean you must utilize your own state’s plan to receive the Federal tax-free benefit of withdrawals for the use of education in all 50 states.
When considering which plan to use, consider all expenses associated with the plan. What are the management fees of the funds? If you utilize an investment advisor, are they charging you a commission to buy their funds? If you invest in the Oregon College Savings plan you may be eligible for a tax credit of up to $170 for single filers and $340 for joint filers but this amounts to 10% of the contribution for the $100K to $250K income bands.
The Oregon College Savings Plan through Sumday Administration provides an easy to use and cost-effective platform for making 529 plan contributions for children and grandchildren. They do not, however, provide any investment advice or guidance into how to invest or how much may be needed.
At Better Planning & Investing we not only provide investment advice on your 529 plans but help you determine just what you may need to save now to meet your college specific needs. We can help you answer how much, for example, it will cost in 16 years to fund four years of college at either Oregon State University or University of Oregon. Got an out of state college in mind? We can help you determine the out-of-state cost expected.
The years to college, expected return on investment and general education inflation are all important considerations. College planning is included in our comprehensive financial planning at just 1% fee of assets under management.
If you’d like a free mini college savings financial plan for your child, including your target college of choice, contact us today. We’ll tell you:
1. How much your college choice will cost on their 18th birthday.
2. How much you’ll need to save either monthly or annually based on the amount saved so far.
Citation: College Tuition Inflation Statistics | BestColleges
