Millennials Beat Boomers at Saving for Their Kids’ College
Money is is flowing to 529 plans in record amounts.
Time Money reports.
Millennials Beat Boomers at Saving for Their Kids’ College
The high cost and ultimate value of a college degree are hitting home like never before, new research shows. A record 69% of families with college-bound children are saving for the expense. A record 39% are using tax-advantaged 529 savings accounts, and parents intend to shoulder a record 66% of their children’s college costs.
These findings from Fidelity Investments underscore the advantages that college graduates enjoy. Some have questioned the economic value of higher education, but most research concludes that college grads earn considerably more over their lifetime than those who do not progress beyond high school.
Millennials are saving the hardest. They are more likely than Gen X or boomers to save in a 529 plan, save monthly, and increase the amount they put away on a regular basis, Fidelity found. Millennials intend to cover 74% of their kids’ college costs, on average, and nearly half intend to cover the full amount—highest of any generation. “They are pretty ambitious in what they plan to do on this front,” says Keith Bernhardt, vice president of retirement and college products at Fidelity.
Comments
Amounts are higher because cost is higher…boomers didn’t need to save as much. Likewise, because the cost was less (and I don’t think 529’s exist for the entire parental tenure of the boomers) they were less likely to invest in a 529, as they may have just used a savings account, which actually used to pay a decent return.