| The facts about 529 college plans. | | | | a normal investing account. Typically, there is an |
| For many this is a no brainer, but you should still | | | | enrollment period each year when you can apply |
| consider the pluses and minuses before you start | | | | and setup your account. From that point forward |
| investing in your child's future. If you are | | | | you can buy credits and invest in the fund |
| wondering what the heck a 529 College plan is, | | | | whenever you would like. The cost is typically |
| read further for the answers. A 529 College plan | | | | adjusted each year due to inflation. Anyone can |
| is a tax deferred savings plan for your kids | | | | donate money to a 529 college plan. |
| education. These are very similar to a 401(k) | | | | Each parent can contribute a maximum of $11000 |
| savings plan often used for retirement. In this | | | | a year per child. The limit is $22,000 for married |
| article we will be covering the benefits of the 529 | | | | couples investing jointly. If other family members |
| college plan, how the plans work, and some pluses | | | | are investing as well the maximum limit is $55,000. |
| and minuses to consider. | | | | The largest plus for 529 college funds are the tax |
| The 529 college plan is a great way to start | | | | free investment you can make into your child's |
| investing now in your child's future. The 529 plans | | | | future. The second advantage is that the plan is |
| are typically sponsored by each state and helps | | | | typically in the parents name and acts as an asset |
| you save tax free. Not only is it beneficial due to | | | | for the parent as does any investment account. |
| the tax benefits but most plans let you purchase | | | | One of the minuses is that congress has only |
| your credits in advance in today's dollars. These | | | | permitted federal exclusions through 2010. If this |
| credits will be honored when your child enters | | | | time period is not extended it may not be |
| college. The savings can be large due to the fact | | | | beneficial for kids planning on attending college |
| that inflation is not a factor in your prepaid tuition. | | | | after 2010. It is very likely this exclusion will be |
| What a deal! | | | | extended as there is over $200+ billion invested |
| One of the other main benefits of the 529 plans | | | | currently in 529 college plans. In addition, those |
| are that you can get into the habit of investing on | | | | funds that you invest today will still benefit from |
| a regular basis. Some of these plans do let you | | | | both pre-tax and inflation savings in the future. |
| withdraw your money with no penalty ,and others | | | | The 529 college plans are a great investment |
| charge you 10% for early withdrawal. If you start | | | | vehicle for your child's future. Make sure you read |
| early when your children are in elementary school | | | | the fine print on each plan you consider and get |
| you will reap the most benefit from both inflation | | | | enrolled today. If you make a habit of investing |
| and tax deferment. 529 College savings plans are | | | | every month, before you know it your child's |
| typically ran by each state. There are also | | | | college tuition will be covered. |
| independent funds that you can invest in just like | | | | |