Thursday, January 25, 2007
Saving Money For College
Dear Guidance Guy,
I have been looking into saving for my two sons for college. They are still very young, not in kindergarten yet. I know this is something that I should sooner rather than later but I didn't know where I put the savings into. I was looking at the 529 Plan on Upromise but I wasn't sure if that is the best place to go. Any good advice?
Thanks,
Amber
*** *** ***
Dear Amber,
A 529 plan is a savings plan for college education. It got its name from the section number in the IRS code. For non-Americans, there may be similar types of plans available through your country. It's great option for many families. There are lots of good features about 529 plans.
One of the benefits of the plan is the money earned from an account is exempt from federal taxes. Another is that the account is controlled by the person who opens it, not the student. So there won't be a child who decides to empty the fund and take off for Europe instead of going to college. And one more good thing is anyone can contribute to the 529. Parents, grandparents, friends, strangers, anyone!
529 plans are state plans, and each state has its own version. What's interesting is that any American can sign up with any state's plan, and you can have as many as you want. Upromise is probably the best known plan because of the extensive marketing and partnerships with well known companies. They are actually the 529 plan for the state of Nevada.
Like any other college savings plan, it's the responsibility of the family to check everything out and decide whether or not it's a good fit for them. My opinion: for most families a 529 plan is a good idea. But check things out carefully.
One other suggestion...make sure your kids are starting off in the right direction for them. Lots of kids go to college without much thought about why. Take a look at The Guidance Guy's So, Your Kid Wants To Go To College... for some good ways to help make this the best experience possible for them.
Best of Luck,
The Guidance Guy
I have been looking into saving for my two sons for college. They are still very young, not in kindergarten yet. I know this is something that I should sooner rather than later but I didn't know where I put the savings into. I was looking at the 529 Plan on Upromise but I wasn't sure if that is the best place to go. Any good advice?
Thanks,
Amber
*** *** ***
Dear Amber,
A 529 plan is a savings plan for college education. It got its name from the section number in the IRS code. For non-Americans, there may be similar types of plans available through your country. It's great option for many families. There are lots of good features about 529 plans.
One of the benefits of the plan is the money earned from an account is exempt from federal taxes. Another is that the account is controlled by the person who opens it, not the student. So there won't be a child who decides to empty the fund and take off for Europe instead of going to college. And one more good thing is anyone can contribute to the 529. Parents, grandparents, friends, strangers, anyone!
529 plans are state plans, and each state has its own version. What's interesting is that any American can sign up with any state's plan, and you can have as many as you want. Upromise is probably the best known plan because of the extensive marketing and partnerships with well known companies. They are actually the 529 plan for the state of Nevada.
Like any other college savings plan, it's the responsibility of the family to check everything out and decide whether or not it's a good fit for them. My opinion: for most families a 529 plan is a good idea. But check things out carefully.
One other suggestion...make sure your kids are starting off in the right direction for them. Lots of kids go to college without much thought about why. Take a look at The Guidance Guy's So, Your Kid Wants To Go To College... for some good ways to help make this the best experience possible for them.
Best of Luck,
The Guidance Guy
# posted by Larry Hochman : 12:27 PM
