Saving for a child before you even have one might seem like an impossibility, but it’s actually not. Thanks to a savings plan called a 529, you can start saving for your future child’s education costs well in advance of actually having any rugrats of your own. And guess what! These plans can even help you save on your tax bill.
529s... Coverdells... when it comes to choosing how you'll save for your kids' college education, the options can be a bit confusing. The articles in this selection will help you make the best informed decision for you and your family.
As you are probably aware, the cost of obtaining a college education is an extremely expensive one these days. Even students and families from an upper middle class background can feel pinched by the burden created by tens of thousands of dollars in tuition costs, textbooks, and living expenses. This grim situation has increasingly forced students to turn to parents and family members for college financing assistance.
There are two primary college savings plans established by the government that can help you prepare your finances for your children’s education. 529 College Savings Plans, and the Coverdell ESA can enable you to provide that education, but each comes about in a somewhat different way.
A 529 plan can be a great way to save for your child’s future. While you won’t get any federal tax breaks, many states offer state tax breaks when you contribute to a plan. And the money grows tax-free, as long as the beneficiary withdraws the money for qualified education expenses.