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Information on College
Savings Plans -
Start saving for your child's education!
It is never to soon to start
saving for your daughter's or son's education. Put away whatever amount of
money you can now! There are two types of college savings plans to
consider.
529 Education Savings Plan - It's
an education savings plan operated by a state or educational institution
designed to help families save money for future college costs. This
savings plan give you the opportunity to contribute money into a
tax-deferred account establish for the named beneficiary (the student).
These funds are typically invested into stocks or mutual funds. There may
be tax benefits to you the contributor as well. This may be the plan
for you if your unsure if your child will attend a state college.
Typically, you may transfer the full value to an accredited college or
university in another state.
Prepaid tuition
plans - this plan is good if your child will attend a college
within the state in which the plan is operated. Your contributions buy
course units at today's price. If tuition increases, then the state pays
the difference between the number of credit hours you bought and current
costs. States that offer the prepaid tuition plans typically pay the
average in-state public college tuition if you transfer your contract to private and out-of-state schools
(in other words you may not get full value depending on the particular state).
If you don't think you can
save exactly the amount you need, consider what your financial status my
be when your child is 18 years old. For some of you that may be 17 years
into the future. By then you may not have a mortgage payment and your
income may be higher...but remember tuition increases every year too!
As always, do your research
into the fund that you are considering to contribute to. Ask friends,
family and coworkers which savings vehicles they are using. It may help
you decide!
Other articles of interest:
Why you should increase your life insurance
Estate Planning to protect and secure your family
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