Saving for College – The Advantage of Starting Early
There is nothing more amazing and exciting than a new baby. For many families the idea of kindergarten seems too distant to imagine during those middle-of-the-night feedings, and college seems like forever away. But both will arrive sooner than expected, and the sooner a family starts to plan for them, the more opportunities their child will have.
As this infographic shows, starting early and saving steadily in a qualified 529 plan, named after section 529 of the Internal Revenue Code, is a smart way to prepare for the costs of a college education. By using certain projections, a family may be able to accumulate more than $86,000 in college savings by starting with $200 per month when a child is born. Instead, if they choose to wait to save until their child is eight years old, they would need to save $500 per month to reach the same amount of projected savings.
Regardless of when a family is able to start to save, every dollar saved before a child enters college can be one less dollar that child will have to borrow and pay back later in life.
The College Savings Plans of Maryland offers two affordable and flexible 529 plans to help families save for college costs. The Maryland College Investment Plan allows families to save as little as $25 per month. The Maryland Prepaid College Trust allows families to save for tomorrow’s tuition at today’s prices for as little as a semester of college. Enrollment in the Prepaid College Trust is open from December 1, 2012 through April 8, 2013. The College Investment Plan is open for enrollment year round.
The College Savings Plans of Maryland are the only 529 plans that offer Maryland taxpayers a Maryland State income deduction for contributions. Contributions made prior to December 31st may be eligible for a 2012 income deduction. To learn more about the options offered by the College Savings Plans of Maryland, visit www.CollegeSavingsMD.org or call 1.888.MD.GRAD (463-4723) to speak with a representative.
Please carefully read the Enrollment Kit which describes the investment objectives, risks, expenses, and other important information that you should consider before you invest in the College Savings Plans of Maryland. The Enrollment Kit is available online or by calling 1-888-4MD-GRAD. Also, if you or your beneficiary live outside of Maryland, you should consider before investing whether your state or your beneficiary’s state offer state tax or other benefits for investing in its 529 plan.
College Savings Plans of Maryland, Administrator and Issuer
T. Rowe Price Associates, Inc., Program Manager and Investment Adviser for MCIP
T. Rowe Price Investment Services, Inc., Distributor/Underwriter of MCIP