Background: Sarah, 38, a mother of two, wanted to start saving for her children’s education. She turned to Fidelity for their 529 College Savings Plan, which offered tax benefits and a range of investment options. Her goal was to save enough to cover tuition fees for both of her children.
The Plan: Sarah opened two Fidelity 529 accounts, one for each child. She chose a diversified mix of low-cost index funds and age-based portfolios, which automatically adjusted the asset allocation as her children approached college age. She planned to contribute regularly, with occasional larger contributions based on her income.
Execution: Sarah automated her contributions through Fidelity’s automatic transfer option and set up a recurring deposit from her checking account. She also used Fidelity’s college savings calculator to track her progress and estimate future college expenses.
Outcome: By the time her children were ready for college, Sarah’s 529 plans had accumulated enough to cover most of their tuition costs. Fidelity’s Tax-Advantaged Planner helped her understand how the tax benefits of the 529 plan grew her investments without incurring taxes on earnings.
Lessons Learned: Sarah found that starting early and using Fidelity’s 529 plan helped her achieve her educational savings goal. By automating her contributions and adjusting her portfolio as needed, she was able to make steady progress and feel confident in her ability to fund her children’s education.