If you can picture the day your kids are accepted to their dream college, imagine how it will feel to be able to say yes.
The path to college isn’t easy, however the path for saving for it can be.
529 Plans: State Savings Plans:
The 529 state savings plan is a tax-advantage college savings vehicle governed under Section 529 of the Internal Revenue Coda (IRC) hence the name "529" plans. A state savings plan lets you save money for college in an individual investment account. The details of these plans vary by state, but the basics are the same.
Prepaid Tuition Plans:
Although prepaid tuition plans are similar to state savings plans in that they are governed under Section 529 of the IRC, the two plans are different. A prepaid tuition plan is a tax-advantaged college vehicle that lets you prepay tuition expenses now for use in the future. Funds can be used for qualified higher education expenses for schools nationwide.
We provide you with all the important aspects of college planning:
- Projecting how much it will cost
- How your savings affects Financial Aid and
- How much you will need to save.
The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that a college-funding goal will be met. In order to be federally tax-free, earnings must be used to pay for qualified higher education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10-percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses.