529 Plans

Written by Seth Cotterell
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Saving for college will greatly reduce the burden of high tuition costs when the time comes to enroll. A savings plan will also help students rely less on expensive student loans and will put them in a better financial situation following graduation. A 529 savings plan is a great way to save money for college.

Advantages of 529 Plans

One of the primary benefits of this investment alternative is the tax break that comes with it. 529 plans are tax deferred. This means that the investment grows but you will not have to pay taxes on it every year like you would with some investments. When the time comes to pay for college costs, there are no taxes on payments made directly for college expenses either.

Convenience is also a huge advantage of 529 plans. Joining a 529 is quick and easy, and there is no additional work involved. You can make payments automatically and a professional financial advisor manages the plan. In some cases, the treasury department of the state where the plan originated is in direct control of the funds. Your 529 plan does not affect your annual income taxes.

Another of the advantages of 529 plans is that there are virtually no restrictions. It does not matter how old you are or how much money you make. You can set up a 529 plan for yourself or you can name someone else, a child for instance, as the beneficiary

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