College is one of life’s most important – and expensive investment goals. We’re here to help you prepare for one of life’s biggest expenses.

Looking At The Big Picture


Choose an education specific account, such as a 529 or Taxable Account (UTMA). Start saving early to take advantage of compounding. Put a plan in place, create a funding schedule and be consistent.

Financial Aid

College requires a plan to pay for the 4 years. Talk to your sons and daughters frequently about cost and what the family can afford. Know your loan and payment options at each school of interest.


Do not get lost in rankings and the “best college.” Focus on finding the “right” college where your student feels they can be successful. It’s all about fit! Finding the right fit means looking at academic, social and financial fit. Start doing visits early to narrow down what is your student’s proper fit. Look for schools of different sizes, locations, and types (private vs. public).

What's a 529 Plan?

A 529 plan is a college savings account that's exempt from federal taxes.

There are two types of 529 plans - prepaid tuition plans and college savings investment plans. Prepaid tuition plans allow taxpayers to lock in the current costs of tuition for use in the future. However, prepaid plan may only be applied to tuition and certain fees at in-state public colleges and universities.

The second type of 529 plan is the college savings investment plan. Pay close attention to the one offered in your state as it may offer you a state tax credit or deduction for participating. If your state doesn’t offer a tax credit, don’t limit yourself to just your state’s 529 plan as many states allow non-residents to invest in their plan. Pay attention to the investment options offered as well as the expenses associated with the 529 plan.

Starting Your 529 Plan

The new tax law differentiates 529 plans and prepaid tuition plans even further, by allowing up to $10,000/year in 529 plans to be used for K-12 school tuition. There are two big areas of caution. First, many state tax laws have not yet caught up with the new federal tax law, so you should check on your specific state tax laws before using the 529 for K-12 tuition. Second, the typical investments used in 529 plans, the “target date” funds, may no longer be appropriate for investors that are planning to use the 529 plans for K-12 tuition.

Steps to Success (Action Steps)

Understand the Costs – the total cost for your child to attend college is high today and is likely to only increase further in the future. Annual tuition inflation is outpacing the overall cost of living. At AssetGrade, our investment models assume that college costs will increase every year and we build this into our client’s funding schedules. It’s important to start your plan with a funding goal and then calculate how much you plan to pay and how much may come from financial aid and family gifts.

Know What to Expect from Financial Aid - many families expect more financial aid then they are actually likely to receive. Families need a thought-out investment plan to make up the difference between grants/scholarships and actual costs if they want to avoid taking out expensive loans or ruling out schools simply because of cost.

Make the Most of Your 529 Plans – With a 529 plan, investment earnings and withdrawals are tax free when used to pay qualified education expenses. Many states allow investors to deduct a portion of their 529 plan contributions, which enables investors to save even more in taxes.