Know More About 529 Savings Plan And Its Benefits
529 Savings Plan - Named after the section 529 of IRC (Internal Revenue Code), the 529 is a program that helps you to save money for your child's college education while offering tax benefits. You can open an account for someone of any age, but the plan is best used as a long term savings option since the longer the funds are invested, the more time to grow. While all parents want the best for their children, saving enough for a college eduction is not as simple as it once was. I recall paying $600 per year at a state university and thinking it was too expensive. Now your books cost more (a lot more) than that. With a 529 savings plan, you can have a fair shot at providing a college education to your child.
You are well aware of the fact that college education has become very expensive. The rate at which the expenses are increasing is much higher than the rate of inflation in the country and is expected to continue rising at the same pace for the forseeable future. If you fail to start saving early in your chld's life, it may be impossible to procure the necessary funding when college arrives without taking large loans which will lead to long term debt for both the student and parents. The 529 savings plan can be an effective tool to assist in college funding.
The 529 plans have advantages over other types of college savings plans since you are allowed to use the funds for other expennses such as books, fees, room and board, and even a computer if required by the school.
A 529 savings plan may be just what you need to help fund your child's education. Before you choose your plan, be sure to check out all the possible benefits and drawbacks of each plan. Making a choice when you are fully aware of facts and figures and your own needs can help you reap rich benefits.