The Best Way To Save For Your Kid’s College with Abby Chao

If you want to save for your kid’s education but have no idea how or are confused by all the different plans out there, then this show is a must listen.

Did you know that over $1 trillion dollars have been saved for college education and nearly 70% of that is saved in a checking or savings accounts? Wow! With several options out there, it can be overwhelming to understand what is available and how to narrow down the best options for your kiddos.

Today we talk with Abby Chao from College Backer. We discuss the pros and cons for Coverdell, UGMA (Uniform Gift to Minor Act) and 529 accounts. With each state pretty much having their own plan, we highlight a few 529 plans that are our top recommendations based on some general assumptions.

One major takeaway from this episode is around expense ratios within the 529 plans. The expense ratios range between 0.2% to 1.3%. That is a massive gap between a bad 529 plan and a best in class 529 plan so make sure you really analyze the cost of the 529 before you start funding it for the next 10-18 years.

College Backer makes it easy for parents and grandparents to save for college in a more social way. They give you a personal link that will allow you to share with family and friends that will allow them to donate directly into your kid’s college 529.

I previously had been using Fidelity NH’s plan prior to making the switch to CollegeBacker and now I have set up an account and a link for both of my kids. College Backer was kind enough to give all listeners a $25 match into the account that they set up if they go to collegebacker.com/financialresidency. I encourage you to go there and sign up for an account today.

Also don’t forget to join the Financial Residency Community on FaceBook to download the show’s freebie.

https://www.facebook.com/groups/FinancialResidencyVIP