Starting a College Savings Planner with the Gerber Life College Plan
Start early, save big with Gerber Life
The great thing about saving for college is that the sooner you start, the easier it is! Generally, the more time you have to save, the less you need to set aside each week, month, or year. Waiting even one year can significantly increase the amount you need to save. For example, putting aside $35.42 monthly for 18 years will get you $10,000*. If you delay and only have 10 years to save, you’ll need to put aside $72.67 monthly to reach the same $10,000 goal.
Where to find money to save in your budget
Instead of thinking how much you have to save each year, or even each month, try finding smaller ways to save for college. For example, you might be able to reach your goal simply by making coffee at home, packing a lunch, buying in-store brands at the grocery, or carpooling. About 50% of parents with children under 18 have already started a college savings plan, putting aside an average of $2,643 annually, according to Sallie Mae's 2013 report "How America Saves for College".
Whether you are able to save more or save less, remember – every bit helps.
Your child can apply for financial aid even if you have a Gerber Life College Plan
Financial aid formulas take assets into account, so some parents are afraid that if they save money for their child's education they will not qualify for financial aid. Under current financial aid guidelines, your Gerber Life College Plan will not count against your child if your child applies for financial aid.
Unlike bank savings accounts or 529 plans, the money in your Gerber Life College Plan is not taken into consideration when determining the student's level of financial need. (Generally, the larger your household income, the less financial aid that is available.) But remember, money is not always available even if you can demonstrate financial need. Setting money aside regularly, even if it is only a modest amount, will likely leave you better prepared to help your child in college.
Your money will be there when you need it
Diversifying your portfolio is a financial planner's way of saying, "Don't put all of your eggs in one basket." It's usually a good idea to have several ways to save in your college savings planner, because diversifying lowers your overall risk. The Gerber Life College Plan is a safe, no-risk policy. You are guaranteed a fixed amount of money that does not go up and down in value like some other college plans. Your money is guaranteed to be there when you need it.Show More ▼ See chart: risk vs. reward
Many families chose the Gerber Life College Plan because it’s a safe, risk-free way to save. They see their Gerber Life College Plan as a sure thing, no matter what's happening in the stock market or overall economy. As with any financial matter, speak with a financial consultant for advice concerning your individual tolerance for risk.
Risk vs. Reward
What college costs
Current costs and estimated annual increases (see chart below) emphasize the importance of starting a college savings planner well in advance. Whatever you can set aside helps.
- Average estimated undergraduate costs for the 2012-2013 academic year, including tuition, fees, room, board, books, supplies, transportation and other expenses, according to The College Board's "Trends in College Pricing 2012":
|Type of School||2012-13 annual
|Annual % increase
in college costs
|Public 4-year Out-
- Estimates of college costs in the future: Using data from the College Board and its website (www.collegeboard.com), and assuming that college expenses increase by 5% annually, the anticipated cost of attending an in-state public college or university for four years beginning in 2026 is $148,000. For private institutions, the anticipated cost is around $353,000. Costs for your child may vary depending on a number of factors, including geographic location and whether your child attends college full-time or part-time, and lives at home or on campus.
Three financial benefits of higher education
When saving for your child’s education, it can be helpful to think of college as an investment in the future rather than as an expense. Among the benefits of a college education:Show More ▼ See Table: level of education
|1||Increased earnings throughout life, based on 2012 median family income, as reported by the Bureau of Labor Statistics:|
|Level of Education:||2012 Median Annual Income|
|Less than High School Diploma:||$24,492|
|High School Diploma:||$33,904|
|Bachelor's Degree or higher:||$55,432|
|2||Better job opportunities. Having a Bachelor degree or higher degree opens up many more job opportunities and can lay the foundation for entering a variety of careers and professions.|
|3||Less likely to be unemployed. According to the Bureau of Labor Statistics, unemployment rates are significantly higher among less educated individuals than among those with more education. The following is a breakdown of December 2013 unemployment rates for people aged 25 and older (not seasonally adjusted):|
|Level of Education||December 2013 Unemployment Rates|
|Less than High School Diploma:||9.8%|
|High School Diploma:||7.1%|
|Bachelor's Degree or higher:||3.3%|
* Example assumes 30 year old female making automatic payments from a checking or savings account
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