The 529 Advantage
In these plans, contributions are made with after-tax dollars and money grows tax-free. This is particularly lucrative if your kids are younger, because your money will have a lot of time to take advantage of the tax-free accumulation.

Use a Roth IRA
If you're torn between adding to your kid's education account and your retirement account—and what parent isn't—a Roth IRA is a good compromise if you're eligible (your adjusted gross income must be less than $166,000 if you're married and filing jointly, or $114,000 if you're single).

"What a Roth IRA does is allow you to save for college or retirement at the same time. Money in this account isn't assessed for financial aid purposes, and you can always access your [savings] penalty- and tax-free," says Tim Higgins, author of Pay for College Without Sacrificing Your Retirement.

Smart Consumer
Since picking a college is a buying decision, try to drive down the cost as much as possible.

Too many students miss their chances at aid and scholarships because their parents think they make too much and would never qualify. But you don't know until you apply. Fill out the Free Application for Federal Student Aid and see what you're offered. 

Tips for finding the best loans and financial aid options 

The step-by-step guide to paying for college

How much do you need to save? Use this calculator to find out!


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