4.2.2.2. Education and College Costs
Since college and higher education are so incredibly expensive, many families turn to financial advisers to help them figure out how to save for this substantial need. Unlike planning for retirement, which may be 20 to 40 years away for many clients, planning for college is trickier in that it requires investing for growth without risking catastrophic loss. Generally, with ten or more years to save, college saving may start weighted toward stocks and gradually move toward fixed-income securities. Target-date/age-based plans are popular. College savings accounts include 529 plans and Coverdell Education Savings Accounts. These plans offer tax advantages if the funds are used for qualified college expenses. Zero coupon bonds can also be good investments for college, because the client can invest a certain amount and receive a fixed amount at maturity, without having to worry about how to reinvest the interest.
UGMA and UTMA custodial accounts a