College is one of the largest expenses many families face. Tuition, fees, housing and books add up quickly, and student loans can follow graduates for years. Starting a dedicated savings plan early gives your money more time to grow.
Virginia families have a strong option for this goal: Invest529, the state's 529 college savings plan offered through Virginia529. Understanding how it works can help you add college savings to your investment plan with confidence.
How Invest529 works
Invest529 is an investment account designed for education expenses. Contributions are invested in a range of portfolios, including age-based options that become more conservative as your child gets closer to college. Earnings grow free of federal and Virginia income tax, and withdrawals are tax-free when used for qualified education expenses such as tuition, fees, books and certain housing costs.
Virginia taxpayers may also be able to deduct contributions on their Virginia income tax return, up to an annual limit per account, with larger contributions generally carried forward to future years. Older account owners may qualify for a larger deduction. This state tax benefit makes saving through a Virginia plan especially attractive for residents.
The earlier you start saving for college, the more time compounding has to work for you.
Pro tips for Virginia families
Treat college savings like any other investment goal. Automate a monthly contribution, choose a portfolio that matches your timeline and keep an eye on fees. Increase contributions as your income grows, and invite grandparents and relatives to contribute for birthdays and holidays.
Remember that savings work alongside other resources. Scholarships, grants and in-state tuition at Virginia public universities, including schools right here in the Shenandoah Valley, can lower the total cost, so your target may be smaller than published prices suggest.
Most importantly, keep investing for your own retirement. Students can borrow for school, but there are no loans for retirement, so a balanced plan keeps both goals on track.
The advisors at Investment Pro Tips help Virginia families build college savings into a smart investment plan. Contact us for a free portfolio review.