The Secret to Sucessful College Savings

Saving for college is a lot like saving for retirement. Set aside a certain amount each month, and reap the rewards down the road. But while retirement vehicles such as IRAs and 401(K)s are better understood, saving for your child’s education can seem murky. How do you know which college savings vehicle will give you the greatest return, while also giving you flexibility and peace of mind?

The answer is easier than you think, says financial advisor Joe Malara of Cetera, a full service FINRA member broker-dealer with a branch inside Bank of St. Francisville.

“Louisiana’s 529 ‘START’ program is one of the best deals you’re ever going to get when it comes to saving for college,” Malara says. “We tell folks all the time there’s no reason that you would need to do this through a financial advisor when you can set up a START account.”

Joe and Pamela Malara of Cetera Investment Service with administrative assistant Dawn Biggs.

IRS-designated 529 Qualified Tuition Plans exist in every state, but Louisiana’s -- known as the Student Tuition Assistance and Revenue Trust, or START, program -- is one of the highest rated 529 programs in the nation.It’s flexible, transferable, offers a state matching program as well as state tax benefits. There is no fee to enroll in the program, and students can use their funds for attendance at a wide range of institutions including four-year colleges and universities, community and technical colleges and qualifying professional academies. Institutions do not have be located in Louisiana.

Malara says the program enables parents to opt for a more aggressive growth strategy when their child is younger, and then scale back to conservative growth with a bias toward preservation as a child gets closer to college. Enrollment happens online. Most families opt for a monthly auto draft to make deposits into their START accounts.

One of the greatest upsides to the START program is that Louisiana residents receive a cash match from the state of 2% to 14%, depending on the account owner’s federal gross adjusted income. Moreover, the funds are completely tax free when they’re drawn down.  

Another common misconception, says Malara, is that you might lose the funds accrued if your child does not use them, or needs them for a different purpose. Actually, they’re transferrable to other beneficiaries in the family with no fee. And, they can be used for other purposes besides education, although the owner would have to pay taxes on the growth and would lose any state match.

Malara says one of the biggest impediments to saving for college is that families sometimes perceive that they can’t afford it.

“They say, ‘Why would I bother to save when I have all these competing financial demands in my life,” says Malara. “But it’s worth it. You might not be able to satisfy the whole cost of education, but if you save what you can and put yourself on a sustainable course, it will most assuredly help your child in the long run.”  

For more information about enrolling in Louisiana’s STARTprogram, visit

Joe and Pam Malara of Cetera maintain regularly scheduled hours at Bank of St.Francisville or are available by appointment. Please call (225) 635-0047 or(800) 901-0047 or visit this LINK.

Further Reading