Financial Fitness with Alan Akina - 529 College Savings Plan

17 Jun 2020 · 2 min

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1:36

In this brief segment of the "Wake Up Today" program, Alan Akina addresses parents of preschool‑age children, highlighting the dramatic rise in college tuition—up 1,120% since 1978—and the financial strain it creates. He introduces the 529 college savings plan as a practical solution, explaining that contributions are made with after‑tax dollars, grow tax‑deferred, and can be withdrawn tax‑free for qualified educational expenses. Akina specifically references Hawaii’s HI529 plan, which is managed by Vanguard, noting its low entry threshold (as little as $15) and the ability for family members to contribute. He advises starting the plan early, even with modest monthly contributions like $20, to maximize growth over time. The segment closes with a sign‑off for the next episode.

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Good morning, gang. For those of you that have a child in preschool, you may already have dreams of them going to an amazing college, walking across that stage with a degree in hand, ready to conquer the world. Then all of a sudden, that dream turns into a nightmare when you realize you have to pay for it. Now, we all know that the cost of tuition is growing at an alarming rate. One report states that tuition has increased 1,120% since 1978. And over that same period of time, medical expenses have grown 601% and the price of food has increased 244%. Now, one thing that you can do right now to combat this is to open up a 529 college savings plan. Now, this is an investment account that allows you to take after-tax money and invest it into various mutual funds and ETFs. Now, these funds will be allowed to grow tax-deferred and can be withdrawn tax-free if used for qualified educational expenses like tuition, and this could happen at any college in the United States. Now, here in Hawaii, we have a program called HI529, and the investment is managed by Vanguard. Now, you can start investing for your kids with as little as $15, and you can also have family contribute. Now, the best time to start is when they are young, even if it's just $20 a month. For Wake Up Today, I'm Alan Akina. See you on Thursday.