Preparing for a child's future is a part of good parenting. Parents, Grandparents, and other family members can contribute to the preparation. Statistics show that higher education can increase your child's chances of receiving a better paying job in life. Funding a plan now can be beneficial, the rising costs of a college education, planning early has added advantages for both you and your child. As with ALL planning, now-rather than later-is the best time to make sure you have adequate protection for loved ones.
Good parenting is also making sure that your children or loved ones can still have their dreams realized even if something happens to you, protection is key.
A 529 College Savings Plan is a tax-advantaged way of saving for a higher education. Anyone (a parent, spouse, grandparent, other family member, friend, or you) can contribute to the plan. The 529 account is used by the student for qualified education expenses, such as tuition and room and board. The account owner (or contributor) has complete control over the account and can contribute no matter his/her income level. The contributor selects from a variety of investment options with varying rates of return.
Comparing college savings options can help determine whether 529 Prepaid Tuition Plans, Education Savings Accounts, U.S. Savings Bonds, or a custodial account is the best tool to save for secondary education.
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As with all tax-related decisions, consult your tax advisor. Withdrawals for expenses other than qualified education expenses are subject to income tax and an additional 10% penalty on earnings. You should consider a 529 Plans fees and expenses such as administrative fees, enrollment fees, annual maintenance fees, sales charges, and underlying fund expenses, which will fluctuate depending on the 529 Plan invested in and the investments chosen within the plan. You should also consider the inherent risks associated with investing in the 529 Plan such as investments return and principal fluctuation on, which will also vary based on the investments made within the plan. More information is available in each plan?s official statement. The official statement should be read carefully before investing.
