How do you plan on paying for your child’s college tuition?
Will it be through your expertly planned out 529 account? A special savings account you’ve set aside for that goal? The envelope of cash you’ve stuffed under your mattress?
Unfortunately, according to a new study from Sallie Mae, the answer for a lot of parents is through their retirement savings. While it’s comforting that more parents reported that they are saving for their retirement than for their kid’s college (remember, you can always take out loans for college, but you can’t for retirement!), it’s disheartening that families said they often draw from those retirement plans to cover college costs.
“The economy is putting pressure on families in terms of whether they’re saving, how much they’re saving and where they’re saving,” Sarah Ducich, senior vice president for public policy at Sallie Mae told DailyFinance.
When asked to describe their feelings about saving for college, respondents in the survey said they felt overwhelmed, annoyed, frustrated, scared, or that they didn’t like thinking about it at all.
At the end of the day, 529s offer added tax incentives and a chance to grow the money you’re saving for your child’s future. You can find out more about what 529 plans are, how to set them up and what to look for in a good one here.