T. Rowe Price Personal Investor - Developing a College Savings Strategy That Will Work Best for You (2024)

FAQs

What is T Rowe Price investment strategy? ›

At T. Rowe Price, we use an active management approach we call strategic investing. It's driven by independent thinking and rigorous research—so our clients can be confident that we'll strive to select the right investments as we help them achieve their goals.

Some people may use custodial accounts to save for college. But 529s and ESAs are generally considered better choices for college savings because of their tax advantages.

Kantrowitz recommends the one-third rule as a rough guide for how much parents should be saving: one-third of the cost of a four-year college education will come from parent's income and financial aid, one-third from savings and investments and one-third from student loans.

T. Rowe Price is best for long-term investors who want support in making portfolio management and investment decisions, including planning for retirement and college. Individual, tax-advantaged retirement mutual fund accounts are T. Rowe Price's primary business, but you can open a more traditional brokerage account.

T. Rowe Price's competitive advantage comes from its brand recognition and expertise.

Say you're planning for a child who's 4 years old today. Your college savings goal should be $60,400 for a public, in-state college; $95,600 for a public, out-of-state college; and $118,900 for a private college. If these numbers seem daunting, don't worry.

There are many benefits to using a 529 plan, like federal income tax benefits and state tax deductions. Plus, 529s offer several advantages compared to traditional savings accounts and other methods of saving for higher education.

529 Plan vs Savings Account

A 529 Plan's main benefits are tax-deferred growth, more growth potential, and tax-free withdrawal for qualified education expenses. A 529 Plan can be invested into ETFs or target date funds which can offer more growth opportunities compared to a lower interest-earning savings account.

Leave the account intact.

You could even leave it for future generations since contributions to a 529 plan are generally considered completed gifts for tax purposes and are removed from your estate. Your financial advisor can help you determine how a 529 plan can fit into your overall financial strategy.

What is the average college savings plan? ›

Average 529 Balance and More Savings Statistics

In June 2022, the average 529 balance was $25,903. In June 2021, the average 529 balance was much higher at $30,287. The vast majority of 529 funds are in 529 college savings plans, not 529 prepaid tuition accounts.

You can call your plan administrator, make a request online, or submit a withdrawal request form. The plan can send withdrawals by check to the account owner, the beneficiary, or the school. You can transfer the money to yourself or the beneficiary electronically and then make payment to the school.

The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.

With index funds, beginners don't have to research stocks and determine the best point to enter the market. “You just pick an index you like and buy a fund that tracks that index. Index funds cost less than building a portfolio by yourself; much fewer commissions,” he added.

The premise of the 30-day savings rule is straightforward: When faced with the temptation of an impulse purchase, wait 30 days before committing to the buy. During this time, take the opportunity to evaluate the necessity and impact of the purchase on your overall financial goals.

Our funds delivered an average of 0.83% more return than comparable passive funds across all periods analyzed over 20 years and showed higher returns in 70% of those periods. Mutual Funds delivered under T. Rowe Price Investment Services, Inc., broker-dealer. 88 funds covering 7,778 rolling 10-year periods.

While the range of offerings for Vanguard and T. Rowe Price are just about equal, Vanguard has a better depth of assets for the more part and also allows for fractional share purchases.

The core of the T. Rowe Price client‑centered investment philosophy is to utilize proprietary research to guide active investment selection and diversification to reduce risk. For more than 80 years, our collaborative, disciplined approach has stood the test of time.

A T-Bill ladder is a strategy that involves sequentially purchasing investment-grade T-Bills that mature at different times in the near future. This latter point is where T-Bill ladders differ from the bond ladder strategy, which focuses on purchasing bank certificates of deposits (CDs) or bonds with longer maturities.