Investing in qualified tuition plans, commonly known as 529 Plans, is a popular way of saving for a child’s college education. Created under Section 529 of the Internal Revenue Code, these state or university-sponsored plans can greatly help in paying for the college education expenses of the account holder’s beneficiary.
Not all 529 Plans, however, are created equal. Chicago-based financial research firm Morningstar annually rates 529 Plans, mainly according to required fees, quality of supervision or oversight, and investment options. From their latest evaluation, it appears the size of a plan’s assets does not necessarily determine its favorability.
“The Coverdell Education Savings Account (CESA) is a special trust account like 529s in the sense that the earnings are tax-exempt. Parents can save stocks or bonds under the account and can even withdraw money for elementary or high-school expenses without tax penalties. However, taking this option requires thorough deliberation with an advisor. Williams states that a savings account holder cannot put in more than $2,000 a year, even if he or she opens at least two CESAs.
There will always be a way to save money for your child’s college education and the abovementioned strategies are among the most notable. Meeting up with top college funding specialists such as Studemont Group College Funding Solutions LLC can help shed light on the possibilities.”
“However, this plan type is often restricted to plan owners and benefactors who are residents of the state where the fund was opened.
The Right Plan
The 529 Plan is a helpful scheme that has allowed many youths get the education they deserve. One state may offer several 529 Plans so it is important for would be plan owners to weigh their options carefully. Additionally, parents may also want to explore other viable college funding solutions, and advisors like John McDonough of the Studemont Group College Funding Solutions, LLC can provide these parents with the necessary guidance.”