3 Tips to making the most of your 529 savings

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three tips to make the most of your 529

savings for many children college will

be one of the most influential

experiences of their lives

it's where they'll expand their minds

discover who they are gain knowledge and

begin to build a future it's also


that's why saving now is so important

what can you do to increase your chances

at success check out these three tips

one start early like with any goal the

earlier you save the better the longer

you keep your money invested the more

time it has to add up and potentially

grow why is that introducing the power

of compounding compounding happens when

you continually reinvest your returns

and those returns are more returns and

so on

to demonstrate let's look at a

hypothetical example let's say you set

aside twelve hundred dollars a year or

$100 a month in a tax-free account such

as a 529 college savings plan that's a

total investment of twenty one thousand

six hundred dollars over eighteen years

but if your account earns 5% a year

you'll actually have about thirty five

thousand four hundred dollars at the end

of eighteen years

that's a big difference

save now and thank yourself later to

invest regularly it's not enough to save

early it also helps to invest often

a lot of 529 plans offer ways to

automate your savings which makes it

easy consider setting up a schedule for

moving money between your bank account

and your 529 account with an automatic

investment plan or if your employer

offers payroll deduction you can save

for college with every paycheck

let's look at why it pays to invest

regularly remember that $100 you were

setting aside each month what happens if

you forget to do so for say three months

out of the year instead of putting aside

$1200 a year you are saving $900 if you

consistently miss investments over the

years you may wind up with more than

nine thousand dollars less avoid missing

a beat by saving automatically you'll be

regularly adding to your account without

even thinking about it 3 focus on the

long term one of the best ways to

achieve your goal is to see the big


of course it's a good idea to take a

look at where your college savings are

invested once a year to make sure they

reflect the amount of risk you're

comfortable with and your child's age if

you need help we've got lots of tools to

help you with your strategy when markets

are volatile it's easy to get caught up

for example if you invest in stocks you

can expect some downturns

don't panic or get market jitters if you

rashly swap investments during a

downswing not only could you lose any

money gained but you could lose out on

the potential upswing

in the long term that setback is just a

blip on the radar it's important not to

let your emotions take hold of your

investment strategy that strategy is

unique to your situation having a plan

and sticking with it could keep you from

making costly mistakes based on

short-term events and that about wraps

up our three tips for making the most of

your 529 savings

remember to help increase your chance of

reaching your college savings goals 1

start early to invest regularly and 3

focus on the long term

investment returns are not guaranteed

and you could lose money by investing in

the plan before you invest consider

whether your or the designated

beneficiaries home state offers any

state tax or other benefits that are

only available for investments in such

States qualified tuition program for

more information about New York's 529

college savings program direct plan

obtain a program brochure and tuition

savings agreement @ww NYC org or by

calling 187 seven and why saves this

includes investment objectives risks

charges expenses and other information

you should read and consider them

carefully before investing

copyright 2013 state of New York