Financing lifelong learning
- Many mid-career professionals are enrolling in college courses to advance in their current career or for new opportunities, while retirees may be seeking personal fulfillment and social connections.
- There are many ways to help finance your education including 529 plans, tuition waivers, and senior discounts.
- Many community and technical colleges offer certification and practical degree programs that can open up new opportunities for retirees and others looking for a career change or increased earning power.
Expand your knowledge without dipping into your savings
Education expenses can be daunting - whether you plan on earning a degree or simply taking a few night classes. Here are a few ways to cut tuition costs.
Lifelong learning is on the rise – and so are tuition costs
Have you ever considered returning to the hallowed halls of academia? If so, you are in good company. Mid-career professionals often enroll in college courses to stay engaged, further their careers or boost their earning power. A growing number of retirees are also going back to school for personal fulfillment and social connection.
529 plans can be used for adult education
State-sponsored 529 plans are a popular, tax-advantaged way to save for post-secondary education. Most people think of 529 plans as something you invest in for your kids’ or grandkids’ education, but you can also use a 529 savings plan to save for your own college education.
Save tax free for tuition with a 529 plan
There are two income tax advantages to 529 plans:
- Earnings on investments in a 529 can accumulate free of federal and state income tax.
- Distributions are not taxed as income at the federal level and in many cases, the state level, as long as funds are used to pay qualified higher education expenses like tuition, books and fees, and room and board (subject to limitations).
529 plans: The advantage over paying cash
Although contributions are not deductible at the federal level, earnings in a 529 plan grow income tax free and will not be taxed at the federal level when the money is used for qualified higher education expenses. This means you are essentially covering your tuition costs and lowering your taxable income at the same time. Plans vary by state, so talk with your financial advisor about the options.
Look for tuition waivers, discounts and tuition assistance
Some states offer free tuition for residents over age 60 who meet eligibility requirements through a senior citizen tuition waiver program. The programs typically exclude degree programs and some classes. In other states, some colleges and universities offer reduced fees or senior discounts.
If you’re still working, check your employee benefits to see if your company offers tuition assistance.
Attend a community or technical college
Because they cost considerably less than most four-year schools, community and technical colleges are growing in popularity as more students seek practical degrees to avoid heavy debt. Many have IT, medical and other certificate programs that may help to boost your earning power, open new career opportunities or help you return to work part time in retirement.
Thinking about going back to school?
There are many options available when it comes to financing your education. Your financial advisor can help you compare 529 plans available in your state, as well as the fees and expenses associated with the various plans. They can also help you evaluate other financing options to come up with a plan that works for your unique situation.