EYEWITNESS NEWS (WBRE/WYOU)— The cost of college will only keep rising, so it’s important to start putting money aside early to cover the cost of tuition for your child or grandchild.

If you are a new parent or your kids are young, experts advise you to start putting money into a college savings plan.

There are several options, but a financial advisor Eyewitness News spoke with suggested either a state-based plan or a retirement account.

For the Yoo family of Clarks Summit, college for their three young sons is far off, but with the average total cost of a 4-year private college around $40,000, these parents already started saving.

“All parents have a concern because college is very expensive now,” said Tak Yoo.

Robert Kudrich is a financial advisor in Dunmore and he suggested two options for saving for college; a 529 Plan, or a traditional Roth IRA retirement account. With a Roth IRA, you can use the account to pay for educational expenses without paying a penalty.

“Pro is if your child doesn’t go to college you didn’t hurt yourself by saving for that because you still have money in your retirement account. It’s growing tax-deferred and it doesn’t hurt you as a far as needs base analysis for federal aid. You don’t have to report that as an asset,” Kudrich told Eyewitness News.

When it comes to a 529 plan, Kudrich says it’s one of the best ways to help a child financially while limiting your own tax liability.

“It’s tax-free. You don’t have to worry about paying taxes on any of it. If your child decides they don’t want to go to college you could change the beneficiary,” Kudrich said.

The only disadvantage to a 529 plan:

“It is going to be counted towards your needs base analysis, so the first $20,000 doesn’t count against you, but anything above that at most the max 5.46% you’ll get penalized as far as financial aid you get,” Kudrich explained.

Opening a college savings account is as easy as the click of a mouse. Simply go online, and open an account without an adviser, as a retail customer, set it and forget it.

“They have those options similar to a 401K where you say conservative, aggressive or moderate. Or enter the year you anticipate you’ll need the money and they’ll invest it and get more conservative as it gets closer to that year,” Kudrich said.

The good news is you’re eligible to apply for any state’s 529 plan regardless of where you live.

Private lenders also offer 529 plans.