A big problem facing families today is saving for college. Joining me now is Keith Bernhardt, Vice President of Fidelity Investments to discuss some helpful strategies. Good morning, Keith! What do you have for us?
"I am here to chat with you about the survey that we recently did that is telling us that families are saving better and better when it comes to saving for college. More families are actually saving for college and saving in dedicated savings vehicles such as 529 plan, and at the same time, there is still a big gap. So when people are trying to save for college instead of coverage goal for the college costs they want to cover, but they are only saving enough to reach about 30% of that goal so there is still a big challenge out there."
Wow, that is a really big gap. Can you elaborate some of the benefits of those 529 accounts?
"Yeah, sure. So 529 savings plans are specifically meant for college savings. The benefit they have is tax benefits. You put money in, the money goes tax referred, so no taxes are locked in the account. When the money comes out, you won''t have to pay taxes on the earnings if you use it for certain college expenses like tuition, room and board, computers, as well as books."
That's awesome. Where can folks go for more information, Keith?
"People should visit fidelity.com/college and there is information there about college gifting, saving for college, as well as 529 plans."