Getting College Funding When You’re A Federal Employee
When your children are ready to earn a college education, the subject of college funds will inevitably arise. During that discussion, it’s important that you are able to empower your children to get a good education without going into debt. A college education is expensive, and if inflation keeps up, the price of tuition is going to increase massively. For these reasons alone, saving up for your children’s education is essential to set them up for success.
If you’re not certain of where to start, here’s how you can plan for your child’s college education as a federal employee:
Start Planning and Saving Now
It’s never too early or too late to start saving for your kid’s college costs. In fact, the sooner you begin planning, the better – and the less you will need to save in the long-run. Evaluate your budget as soon as possible and determine how much you can allocate to your child’s college savings.
Save Often and Regularly
To accumulate enough money to finance four years of college, you must save regularly and aggressively. Instead of saving up an annual lump sum, consider saving up a small amount every month. This will help you take advantage of the compound interest and averaging strategy, given that every month counts. Alternatively, you can front-load your child’s account for five years but make sure that the contributions do not exceed the gift tax.
Know the Costs
Planning for college will require you to estimate what the total cost of the college education of your child is likely to be. Keep in mind that inflation could occur, and make an estimation based on annual costs. The numbers are supposed to scare you into action. Make a plan of how you will contribute, and stick to it. If your child has several years before college, it might be time to diversify your savings into growth, and income bond and stock funds. This reduces your exposure to market instability when you want high returns.
Know Your Options
There are several combinations of financing methods and investment vehicles that will help you come up with money for your child’s college education. For the best results, we suggest taking advantage of multiple tax-deferred and tax-deductible methods. Some investment options also include:
529 plans
Roth IRA
Prepaid tuition plans
Coverdell Education Savings Account
UTMA and UGMA accounts
Check Out Our College Funding Guide
Paying for your child’s college education without financial constraints and stress is possible. To get started on this critical journey, consider using our free online tools.
Download our FREE College Funding Guide for a great online resource that will help you to understand the steps you can take and the preventative measures you can put in place to help your child move into this stage of their life. Join WAEPA today and get access to the diverse services and resources offered to our membership. After 75 years in business, we are 44,000 members strong, and still providing financial wellness planning, scholarships, and other resources tailored specifically to federal employees to our members.
____________________________________________________________________________
Did you know? WAEPA offers scholarships to children of WAEPA members insured under our Group Term Life Insurance Program.
Since 2007, the WAEPA Scholarship Program has awarded over $1.2 million dollars in scholarships. The scholarships are available for full-time study at accredited institutions, which can include four-year colleges and 2-year vocational schools. Every year, we proudly provide tuition assistance for up to 75 individuals.
Worldwide Assurance for Employees of Public Agencies (WAEPA), is a nonprofit association (not an insurance company) formed by federal employees, for federal employees. The goal of WAEPA is to provide access to products and services that promote the health, welfare and financial well-being of its members. After 75 years in business, WAEPA has over 44,000 members.
WAEPA
433 Park Avenue | Falls Church, VA 22046
Phone: 800-368-3484
Email: info@waepa.org
Website: waepa.org