Voices: Kenneth Roberts | College education more important than ever

For people entering the workforce, a college education is more important than ever.

There are many job openings in the country, but most for them are for specialized skills that require a strong educational background.

The last JOLTS report showed that there were over five million job openings currently in the U.S. JOLTS stands for job openings and labor turnover survey; the JOLTS report is released every month.

College costs have risen much faster than the rate of inflation. According to the College Board, tuition and fees at the average U.S. public school will cost $9,650 for in-state residents and $24,903 for out-of-state residents this year. Private colleges will average $33,480 per year.

Those costs are just tuition and fees, they do not include room and board, books and supplies and other necessary living expenses.

Student loans are readily available, but many students end up getting buried in debt. Total student loan debt in the country right now is over $1.3 trillion, and some say that it is at crisis levels. There are some forgiveness programs available for those with too much student loan debt.

If you don’t want your child to have to take out loans to get through college, you should start saving as early as possible to give the funds time to compound.

One of the best account types to invest for college with is known as the 529 plan, or college savings plan. The 529 plan has tax advantages like retirement accounts. Your funds can grow without taxation and withdrawals are tax free as long as the funds are used for higher education purposes.

Up to $400,000 can be invested in a 529 plan per beneficiary. You can gift up to $14,000 per year or $28,000 per married couple without tax consequences.

There is also an accelerated gifting program that allows contributions of $70,000 per person or $140,000 per married couple. That is considered to be a five year gift and can be repeated every five years.

The accelerated gifting allows grandparents, parents and anyone else who wishes to help someone with their college tuition the chance to get a good sum of money invested early in the beneficiary’s life so the compounding process can help even more.

Saving for college is a lot like saving for retirement, but usually you have much less time. Start saving early and plan ahead.

Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.