My Son is turnig 5 next august.
I want to start a college savings plan for our 4 1/2 year old son. I understand each state has its own 529 plan or others.
Any suggestions from parents putting money away for their kids' college future? Any advice would be helpful.
I'll like to get him a College savings plan e.g 529 plans etc, what else is there available, are there more options?
What things I need to look into befor signing up..
If you are saving for college expenses, you should take advantage of federal tax breaks aimed at families saving and paying for college. These include the following:
Qualified Tuition Programs (529 plans)—Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs.
Coverdell Education Savings Accounts— Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs. May also be withdrawn tax-free for primary and secondary school expenses.
You can read about these at
Our state also has the college savings plan. You pay for 2 or 4 years of college now and it protects you from the cost increases. So you would pay for your sons tuition over the next 13 years. When he starts college, it is all paid for. It is tranferrable to almost any college. If they get a scholarship, the money can be used for another child or other educational expenses. However, room & board and books, etc need to be saved for separately.
That's where the 529 plan comes in to play - additional tax free savings.
You can also contribute to an Edcuational IRA at a bank or through your investment broker.
Finally, monies in the parents Roth IRA's can also be withdrawn, tax & penalty-free, for use on higher education.
This article contents is post by this website user, EduQnA.com doesn't promise its accuracy.
More Questions & Answers...