GOAL: Higher Education

If you have children at home, there’s a good chance you’ve thought about them going to college, or to a trade or technical school. Or, maybe you’ve set that as a goal for yourself.  

Education is a great personal investment, and there are a lot of tools and techniques that can help you build up the funds you will need.

Get Started in 3 Easy Steps
Step 1

Let time be your ally

Starting early is usually good investing advice, but it’s especially valuable when saving for education. Investing over a long period helps your savings grow. That’s because your money has more time to benefit from compounding. Letting your money work for you that way can significantly cut down on your total educational costs.

Step 2

Use savings accounts designed for educational expenses

Since education is so important, the government allows us to save for these expenses in accounts with special tax advantages. Two of these accounts are the Coverdell ESA (Educational Savings Account) and UGMA/UTMA accounts. It is also possible to use funds in a retirement IRA for college without incurring penalties. This can be a good strategy for some people, but there are restrictions, so you should discuss the option with a tax advisor.

  • Suggested for this goal
  • Could also work for this goal
  • Not typically used for this goal
Step 3

Choose your funds

It’s all about timing. If you have more than five years before the first tuition bills arrive, you will probably want to invest a good chunk of your savings in a stock fund. Equities carry higher risk, but historically they have delivered higher long-term returns. As time goes on, you’ll probably want to shift assets to funds with lower levels of volatility. Homestead offers funds across all of these categories to help you reach your goal.

We can help you get there, including setting up your savings account for educational expenses, and helping you choose from Homestead’s family of funds, to invest and grow your savings.

Your next step:
You can open an account in any of our funds online today. If you need help deciding which fund or combination of funds is right for you, visit the Make a Plan page.  Or, call the Homestead service line at 800.258.3030 and choose option 2.