Though retirement accounts are best used as retirement vehicles only, the tax-free withdrawal advantage of a Roth IRA makes it a useful savings tool for other needs young adults have, such as additional education expenses not covered by savings or a down payment on a first home.
CSPN is helping maintain this unanticipated attention by doing its share to raise awareness even further about the importance of 529 plans and the impact they can have on helping families avoid high student loan debt.
Approximately two weeks ago, the president announced an educational reform initiative that included removing the federal tax benefits from 529 plans. Under current law, savings in a 529 plan grow tax-free and withdrawals are not taxed when used for higher education.
Virtually all my friends have children, from newborns to kindergarten age. We all reminisce about the days when college was a third of the cost and wonder how the heck we will pay for our kids to go to college.
If you haven't accomplished the earlier savings priorities, such as setting aside a rainy day fund or funding your retirement account, then stop beating yourself up over your lack of college savings. You're not there, yet.