We have 2 kids under 5. What's the best way to save for college?

By Reecy Aresty
January 09, 2014
FL FAQs/Financial Issues

The earlier you start, the greater the benefit. Depending on your state, there are some very worthwhile Pre-Paid College Plans that include tuition, dorm and fees. The price for a 4-year FL Pre-Paid Tuition Plan is about $17,000, but the cost today for 4 years of tuition is $26,000, assuming no increases. The benefit (average 1 year tuition cost at a FL state college) can be used at any college or university, and there is no tax on the gain! Start putting something away today, so you'll lessen the burden when they go off to college.

The earlier you start, the greater the benefit. Depending on your state, there are some very worthwhile Pre-Paid College Plans that include tuition, dorm and fees. The price for a 4-year FL Pre-Paid Tuition Plan is about $17,000, but the cost today for 4 years of tuition is $26,000, assuming no increases. The benefit (average 1 year tuition cost at a FL state college) can be used at any college or university, and there is no tax on the gain! Start putting something away today, so you'll lessen the burden when they go off to college.

It's impossible to predict what the stock market will do, so I'd advise only to risk a small portion of your kids' education on something that could boom, then turn into a bust. Unless there are very special situations, like when Ford was selling for $1/share, would I recommend buying stock.

Financial advisors have seen college funds and retirement plans devastated - e.g. 10-19-87 when the Dow lost 20% of its value in 1 day!

From 2003-2007 we had a bull market; from 2007-2009 the worst downturn since the Depression. Now that we've been in a bull market for the past 5 years, the risk/reward ratio dictates another downturn could be just around the corner.

Ever since 1979, I've been recommending fixed tax deferred annuities as a savings vehicle. Unfortunately, guaranteed returns today are only around 3.5%/yr. These products are guaranteed, safe, insured, will grow, have no downside risk whatsoever and liquidity.


Reecy Aresty, a noted college financial aid expert and lecturer since 1977, has helped thousands of families protect their assets, increase their wealth, and reduce their taxes. Reecy focuses on the College Admissions and Financial Aid Process to help families legally cut the cost of college by as much as 90%! Visit his website for more information.

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January 09, 2014
Categories:  FAQs

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