Saving for your child or grandchild's higher education is one of the most important investments you can make for his or her future. To make saving for college easier, the Qualified Tuition Program or 529 plan was created. Named after section 529 of the Internal Revenue code, it is a federal-income-tax-free savings plan to be used for qualified educational expenses. Many states throughout the country also offer their own versions of the 529 plan; those are administered by state agencies and other organizations.
Currently, there are two different versions of the 529 plan from which to choose:
At the moment, 49 states and the District of Columbia offer at least one kind of 529 plan.
There is a lot to be said for opening a 529 plan for your child's education. Below are a few of the benefits offered by these plans, and how you can best take advantage of them.
While a 529 college savings plans can look inviting on the surface, don't forget that there are other ways to save for your child's college expenses, such as:
There are a number of advantages to investing in a 529 plan for your child's education, not the least of which are the federal and state tax benefits. However, as with all savings plans, it's best to start early while your student is still a toddler to get the biggest financial benefit from your investment.
It's easier to save money for college when your low credit score doesn't make you pay high interest rates. You can check your credit score and read your credit report for free by joining MoneyTips.
Originally Posted at: https://www.moneytips.com/college-savings-plans
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