For many parents, the largest single expense they will have for their children is college. The cost is skyrocketing: for the 2026-2027 school year, in-state tuition plus expenses at the University of Connecticut is $36,758, while the total at nearby private school Yale is an eye-popping $94,100. Luckily, while costs seem out of control, saving for higher education doesn’t have to be complicated. Westport Lifestyle spoke to trusted experts for their top saving-for-college tips heading into this school year.
529 Plans for College Savings
Financial professionals often recommend considering a 529 account for college savings. “I would suggest opening a 529 for each child when your children are young, and beginning to save small amounts on a regular basis,” says Michael Wein, Financial Advisor at The Wein Group, Morgan Stanley Wealth Management. If you’re not familiar, 529s are investment accounts designed to provide tax advantages for families saving for educational costs. “They grow tax-free and, when you withdraw funds for qualified educational purposes, they’re tax-free withdrawals as well,” explains Koy Price, Associate Financial Representative at Saugatuck Financial. (And “qualified educational purposes” includes not just tuition but room, board, books, meal plans—says Koy.) “If a child is planning on going to college and that’s something the family wants to fund, a 529 can offer serious tax advantages.”
Balance Your Goals
While the exact amount you save—and how often you make contributions—is an individual choice, “in simplified terms, we recommend early and often,” says Spencer Avalos, Managing Partner at Darwin Wealth Management. But that doesn’t mean neglecting other long-term savings goals, like planning for retirement. “Having a plan that takes care of both—that makes sure your retirement is strong as well as creating opportunities for your children—is huge,” says Koy. “Retirement planning is an important consideration alongside education savings.” Spencer agrees: “Priority-wise, your most expensive goal for most people is retirement—it’s like putting your own oxygen mask on first,” he says. The structure Spencer generally recommends is figuring out how much you need in cash savings and how much should be going towards retirement. “Anything outside of that needs to be working for some goal of yours,” Spencer says—including college savings, of course. “By establishing those goals early, you can reverse engineer [your contributions] from there.”
Embrace The Flexibility
“The plans are more flexible than you think,” says Michael. For example, while he recommends having a 529 account for each child, any unused funds can be rolled over between children, used for graduate school, or even passed on to the next generation. Additionally, explains Koy, in 2026, up to $35,000 can be rolled over into a Roth IRA for the child, to start their retirement savings journey. (Withdrawals not used toward education or the Roth IRA allotment are subject to ordinary income tax on the gains, as well as a 10 percent penalty on the gain.) So while you don’t want to deliberately, massively overfund a 529, there are plenty of options if you do find yourself with excess savings in the account—which is, of course, much better than the alternative of not having enough!
It’s Never Too Late
There are benefits to using an education savings plan, no matter how old your children are. “Maybe what goes into it changes because you’ll be using it sooner than, say, the parent of a one or two-year-old who can take on a little more risk, but it’s never truly too late,” says Spencer. Another thing that can help if you’re behind on the savings game: “529s allow you to, basically, fund up to five years of the gifting limit in a single year,” says Michael, and that’s per person, so a married couple could conceivably up to $190,000 at once, for a jump-start. No matter what, “when it comes to having these dollars invested,” says Koy, “anything is better than nothing. Tax deductibility [in Connecticut] and tax-free growth, even if the child is older, may be a good strategy.”
Disclosure:
This publication is provided for informational purposes only and is not intended as financial, legal or tax advice. Please see your Financial Representative for specific recommendations to meet your personal needs and objectives. Financial Representatives do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation. All investments carry some level of risk, including loss of principal invested. No investment strategy can assure a profit and does not protect against loss in declining markets.
Members of Saugatuck Financial use Saugatuck Financial as a marketing name for doing business as representatives of Northwestern Mutual. Saugatuck Financial is not a registered investment adviser, broker-dealer, insurance agency or federal savings bank. To view detailed disclosures regarding individual representatives, view their information at https://www.saugatuck-financial.com/.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries including Northwestern Mutual Investment Services, LLC (NMIS) (Investment Brokerage Services), registered investment adviser, broker-dealer, and member of FINRA and SIPC, in Milwaukee, WI.
The 529 Plan Program Disclosure contains more information on investment options, risk factors, fees and expenses, and potential tax consequences. Investors can obtain a 529 Plan Program Disclosure from their Financial Advisor and should read it carefully before investing. Investors should also consider whether tax or other benefits are only available for investments in your home state 529-college savings plan. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for legal matters. Morgan Stanley Smith Barney LLC. Member SIPC.
Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Individuals should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trusts, estate planning, charitable giving, philanthropic planning or other legal matters.