Tag Archives: education

Planning for College Costs, Part II

In part 1 of this article, I explored how you can estimate how much college will cost and how much you need to save, going forward, to accumulate enough savings to cover the amount that you plan to contribute towards your child’s college costs.  One of the major variables in this calculation is what you assume about how you will invest the money that you save.  While you can design a portfolio yourself, it is also worth looking at funds that combine the major asset classes into portfolios at various risk levels.  Continue reading

Ranking the Investment Options in 529 Education Savings Plans

If your New Year’s resolutions include saving more for a loved one’s future education, your mind may have turned to 529 plans.

Though the performance of these plans improved last year, according to a recent Wall Street Journal story, there are many such plans, and they vary widely in quality. They particularly vary in terms of the investment options they offer once you’ve put your money into the plan.

“Saving for college is a major financial planning item. Local governments have set up tax exempt saving plans for College which is a great idea. Somehow, what we have ended up with is a confusing mess. The problems come when you look into the details of the plans,” says Simon Napper, president of MyPlanIQ, a firm that analyzes investing options in corporate 401(k) plans as well.

As illustration, Napper put together an analysis of how well investors would have done in the following state plans if they had allocated their investments in a diversified manner. Continue reading