Grandparents Kicking in Money for College
In the past few years, it is common for grandparents to give their grandchildren expensive Christmas gifts such as the newest models of Playstation and Xbox. Nowadays, the trend has changed, as most grandparents are replacing these Playstations and Xboxes with small envelopes containing money or gift certificates that can help them during their college years.
In a research done by TIAA-CREF, the number of American grandparents inquiring about education-related topics has raised by 10% in comparison to the past few years. This is quite a surprising trend seeing that grandparents usually spoil their grandchildren with expensive gifts and pay little attention to their educational expenses as they think their grandchildren’s parents can handle it. Now, it is actually the grandparents who put more emphasis on their grandchildren’s future, helping them in whatever methods possible.
Regina Louise, a leading expert in analyzing the ever-changing consumer trends, talks about why American grandparents are now starting to help their grandchildren prepare for their college years.
“I think it’s to their credit”, Regina says. “Grandparents have the wisdom of age. They have watched college education play out over multiple generations and I think they have a real appreciation and a practical pragmatic approach to understanding that”, she continues.
Regina also mentions the importance of 529 plans, a plan that most grandparents have, in assisting children on their college years. Regina says that if someone enrolled for a 529 Plan with a $100 starting balance and they pay $25 monthly, with just 5% interest, they can have $7000 at the end of the 15th year. With such a small starting amount, Regina states, you can help your child prepare for college without having to worry about his or her expenses.
Regina is also encouraging more grandparents, and parents alike, to enroll, or contribute to a (should they have one already), 529 plan due to its numerous advantages and benefits. Not only can they help their children go to college with little to no monetary problems, contests such as the “Big Dreams Start Small” are held regularly which can give families a chance to win $100,000 – a prize that is more than enough to fund 2-3 children going on to their college years.
For people who are interested on starting a 529 plan but don’t know where to start, Regina suggests that they can speak with their financial advisor or check for more information online about 529 plans and how it can benefit grandparents and grandchildren alike.(Hear her interview and find the transcript at https://bloomerboomer.com/?p=12497)
Category: Articles, Retirement Planning
