John Heidbreder had funds from an inheritance from his father and he had a great plan – use the money to pay college tuition for his two daughters.
In 2003, he put those funds into Private College 529 accounts for each daughter. College tuition was rising sharply during “the oughts.” John, an experienced investor, says he didn’t believe he could invest and keep up with tuition increases seen during that time. He liked the opportunity to “buy it now and not worry whether the market is up or down.”
The nationwide scope of colleges was appealing to him. John and his wife, Mary, moved 10 times during his working career and says he was reluctant to save in a state 529 since he didn’t know where he would be living when his daughters would be in college. They now live in retirement near Savannah, Ga.
Both daughters attended Private College 529 member schools during the Great Recession – Kathryn at Catholic University of America and Christine at the University of Miami. John says it was a great relief knowing he had prepaid tuition for each. “I didn’t have to worry about whether the market was up or down, and I didn’t.” His daughters were in, or approaching, college at a time stock and bond markets were tanking. Just like now.
Besides the benefit of tuition guaranteed by member schools, Private College 529 offers the opportunity to save on the cost of college by prepaying. John estimates that the family saved nearly $100,000 in tuition costs for his two daughters. “The best investment I ever made was this plan.”
John’s advice to young families is to lock in as much tuition as you can, as early as you can. “I would encourage young parents especially to contribute as much as they are able to their Private College
529 account and lock in the current rate for college tuition. Prepaying early can potentially save you thousands compared to paying the future inflated market price when the time comes. “Even if you can’t save for the full costs of college, every little bit helps to meet expenses and reduce future debt for your child.” He adds that he’s now thinking of accounts for grandchildren…though none are imminent.
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